Example: An investor wants to buy shares in a company’s stock immediately at the best price available. After they buy the shares, they want to hold them until their price increases by a certain amount, at which point they want to sell them for the best price bid by buyers.
Using a market + stop market order lets the investor set up both the buy order and the sell order for their investment position right from the start. This order instructs the broker to buy the desired assets at the best available offer (the buy market order), hold those assets until their price reaches a stop threshold set by the investor when the order is placed (the sell stop order), and sell the assets to the highest bidder once the stop threshold has been surpassed (the sell market order).
Note: A market order instructs brokers to buy or sell assets at the best available offer or bid. In the case of highly liquid or volatile assets, the price at which the broker is able to buy or sell the assets may be higher or lower than the stop threshold. Market + stop limit orders provide an alternative for investors who want to specify the minimum price at which they are will to sell assets.