# Market-on-Close (MOC) Orders: How They Work, Risks & Benefits

![Market-on-Close (MOC) Order: A non-limit order executed as close to the end of the market day as possible.](https://www.investopedia.com/thmb/o_U9Whg8aHkYuoZ2RQPnQSNPOgM=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Marketonclose_final-7137267fc8384db68ca6e1b9fc22375d.png)

*— Investopedia / Michela Buttignol*

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

A market-on-close (MOC) order is a type of market order that's executed as close as possible to the official closing price of the trading day. Traders often use MOC orders to align their trades with end-of-day price movements or index adjustments.

These orders must meet specific timing rules set by exchanges like the NYSE and Nasdaq, which dictate when MOC orders can be submitted or canceled. While MOC orders offer the advantage of capturing the closing price for strategic trading purposes, they come with risks such as price uncertainty and potential imbalances during the final moments of trading.

### Key Takeaways

*   A market-on-close (MOC) order is executed at or near the market's closing price.
*   MOC orders can be useful for capturing the closing price without immediate market closure actions.
*   Traders use MOC orders as part of strategies to manage trades impacted by anticipated events.
*   MOC orders are subject to end-of-day price fluctuations and potential trade imbalances.
*   MOC orders must be submitted before a specified time and cannot be canceled last minute.

## How Market-on-Close (MOC) Orders Function

A market-on-close order is a [market order](https://www.investopedia.com/terms/m/marketorder.asp) set to trade at the close at the latest price. The MOC order remains dormant until near the close, at which time it becomes active. Once the MOC order becomes active, it behaves like a normal market order. MOC orders can help investors to get into or out of the market at the closing price without having to place a market order immediately when the market closes.

Traders frequently use MOC orders as part of their [trading strategies](https://www.investopedia.com/terms/t/trading-strategy.asp). For instance, traders might want to buy or sell a [financial instrument](https://www.investopedia.com/terms/f/financialinstrument.asp) at closing if a price target is hit during the day. MOC orders do not specify a target price, but traders sometimes use MOC orders as a [limit-order](https://www.investopedia.com/terms/l/limitorder.asp) qualifier, which means that a limit order will be automatically canceled if it isn't executed during the trading day.

Using a MOC order in this way ensures that the desired transaction is [executed](https://www.investopedia.com/terms/e/execution.asp), but it still would leave the investor exposed to end-of-day price movements.

> **Important**
>
> Although placing a market-on-close (MOC) order can guarantee that your buy or sell order will occur at the close of trading, it does not guarantee the price.

## Pros and Cons of Market-on-Close (MOC) Orders

There are a number of situations in which an investor might want to get the closing price of a security. If you suspect that a company's stock might move drastically overnight—as the result of a scheduled after-hours [earnings call](https://www.investopedia.com/terms/e/earnings-call.asp) or an anticipated news story, for example—then placing a MOC order would ensure that your purchase or sale would take place before the news breaks the next day.

MOC orders can also be convenient when an investor knows that they're not going to be available to execute an essential transaction, like exiting a [position](https://www.investopedia.com/terms/p/position.asp), at the end of the day. Placing MOC orders is useful for trading on foreign exchanges outside your time zone.

A drawback of MOC orders is not knowing the fill price if you're absent at market close. MOC orders might face poor execution due to end-of-day trading [clusters](https://www.investopedia.com/terms/c/cluster_analysis.asp), though this is rare.

## Real-World Example of a Market-on-Close (MOC) Order

Suppose a trader owns 100 shares of company ABC, which is expected to report negative earnings after the closing bell. ABC's earnings have failed to surpass analysts' expectations for several quarters, but its stock price has not displayed adverse price movement during the day. In order to minimize losses from a selloff in ABC's shares after its earnings call, the trader places a MOC order to sell all or part of their shares in ABC.

## The Bottom Line

Market-on-close (MOC) orders are non-limit market orders executed at or near the close of trading to capture the day's final price. They're especially useful for traders anticipating end-of-day stock movements or those who can't trade during regular hours.

While MOC orders can be strategic tools, they also expose traders to last-minute price swings and potential imbalances at close. To use them effectively, investors must follow exchange-specific cut-off times on platforms like the NYSE and Nasdaq and consider how these orders fit within their broader trading strategy.