What is a market-on-open order used for?

A market-on-open order is specifically designed to execute at the market's opening price. This type of order ensures that a trader buys or sells a security as soon as the market opens, based on the prevailing bid and ask prices at that time. The primary goal of utilizing a market-on-open order is to take advantage of the price established at the start of the trading day, which may be favorable, given that it reflects the overnight developments and pre-market activities.

Using a market-on-open order can be particularly strategic for traders who want to ensure their trades take place immediately at the opening without waiting for the market to fluctuate throughout the day. This is different from options like limiting orders, which require specific conditions to be met before they are executed, or plans to trade after the market closes. A market-on-open order obligates execution at the market’s opening price, which is reflected in the nature of option C.