Market-on-Close (MOC) Order Explained: Risks, Benefits & 2025 Pricing Insights

What Is a Market-on-Close (MOC) Order?

A Market-on-Close (MOC) order is a special type of market order executed as close as possible to the stock market's closing price. Unlike limit orders, MOC orders do not specify a price and are designed to fill at or just after the market close, ensuring traders capture the final price of the trading day. However, availability of MOC orders varies by exchange and broker.

For example, on the New York Stock Exchange (NYSE), MOC orders must be submitted by 3:50 p.m. Eastern Time (ET) and cannot be canceled or reduced after 3:45 p.m. ET, except to offset published imbalances. Similarly, on Nasdaq, MOC orders are accepted until 3:55 p.m. ET but cannot be modified or canceled after 3:50 p.m. ET.

Key Highlights

• MOC orders execute at or shortly after the market close without a price limit.
• They are often used by traders anticipating next-day price movements.
• A surge in MOC orders can cause imbalances during the market close.

How Do Market-on-Close Orders Work?

MOC orders remain inactive during the trading day and activate near market close, behaving like standard market orders at that time. This allows investors to enter or exit positions at the closing price without immediate market order execution. Traders often use MOC orders strategically, for example, to exit positions if a price threshold is breached during the day.

While MOC orders do not specify target prices, some traders use them alongside limit orders as a fallback—if a limit order doesn't execute by the close, the MOC order ensures the trade is completed at the closing price.

Important: Although MOC orders guarantee execution at market close, they do not guarantee the exact price received.

Benefits and Risks of Using MOC Orders

MOC orders are beneficial when investors want to lock in the closing price, especially ahead of anticipated overnight events like earnings reports or major news that could impact stock prices. They are also useful for investors who cannot be present to trade at the market close or who trade on foreign exchanges with differing time zones.

However, the primary risk is price uncertainty since the execution price can fluctuate right before market close. Additionally, heavy trading volume near the close can sometimes lead to less favorable fills, although this is uncommon.

Real-World Example of an MOC Order

Imagine a trader holding 100 shares of ABC company, which is expected to announce disappointing earnings after the market closes. Despite no price drop during the day, the trader places an MOC order to sell shares at the close to avoid potential losses from a post-close selloff triggered by the earnings report.

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