What is an At Best Order?

An “at best order” tells your broker to buy or sell a stock, bond, or other investment at the best price they can get when they go to make the trade. You’re basically saying “I want to make this trade – just do it quickly at whatever the current market price is.” It’s a type of market order, which means you want it done now, not at a specific price in the future.

How At Best Orders Work

Here’s the deal. Let’s say you have your eye on some shares of Acme Corporation because you think they’re going to crush it next quarter. You call up your broker and say “I want 100 shares of Acme, at best.” Your broker takes that as their marching orders. They hustle over to the stock market and see the current prices people are buying and selling Acme at.

Buying At Best

If you’re buying, your broker looks for the lowest price somebody is willing to sell those Acme shares for at that moment. Maybe it’s $50 per share, maybe it’s $51, whatever the best deal is. They snap up 100 shares for you at that price. Boom, order filled, you’re now the proud owner of a fresh batch of Acme.

Selling At Best

Now, flip the script, you want to unload those Acme shares. You ring your broker again and say “Sell my 100 Acme shares at best.” Off they go to the market, this time looking for the highest bid. If somebody is willing to pay $55 per share, that’s the price you get. They make the trade, and just like that, cash is heading your way.

The Upside of At Best Orders

The big draw of at best orders is speed and simplicity. You don’t have to fuss around deciding what price you want. You just say go and your broker makes it happen at the current market price, whatever that happens to be. This is super handy if you’re confident you want to make a trade and you don’t want to risk missing an opportunity by dithering over the exact price.

The Downside of At Best Orders

The flip side is you give up control. With an at best order, you’re at the mercy of the market. If prices are jumping around like a kid on a sugar high, you might end up paying more than you hoped for, or selling for less. It all depends on what the market is doing at the precise nanosecond your order hits the trading floor.

When to Use At Best Orders

At best orders are the grease that keep the wheels of the market turning. They’re a great go-to most of the time, especially if you’re trading big, stable companies or funds where the price doesn’t bounce around too much. The current price is usually in the ballpark of what you expect.

For Quick Trades

At best orders really shine when you spot a hot opportunity and you need to move fast to seize it. Maybe you just heard some juicy news that’s sure to send a stock soaring. You want in on that action pronto. An at best order is your express ticket before the price starts climbing.

For Cutting Your Losses

Same goes if you need to bail on a bad bet. If a stock you own is tanking and you want to get out before it craters completely, an at best order is your ejector seat. You might take a hit, but at least you’re out. Trying to set a specific sell price might leave you stuck in a plummeting dud.

When to Think Twice About At Best Orders

There are some moments when at best orders might not be your best bet. If you’re a real stickler about the price you pay or get, you might want to consider other options, like limit orders.

In Volatile Markets

When things are going berserk, prices can swing wildly between the time you place an at best order and the time it’s completed. That’s not usually a big deal for a few cents here or there. But if we’re talking huge swings on big orders, it starts to add up.

For Thinly Traded Securities

Some securities, especially small company stocks, don’t have a lot of buyers and sellers. The price you see might be stale, and an at best order could get filled at a price way off from what you expected. In these cases, it can pay to take it slow and set some price boundaries.

Other Types of Orders

At best orders are just one tool in your investing toolbox. You’ve got other options to cover different situations.

Limit Orders

With a limit order, you set a ceiling on how much you’re willing to pay for a buy, or a floor on how little you’ll accept for a sell. Your broker won’t complete the trade unless they can hit that magic number. This gives you price control, but you run the risk of your order not getting filled if the market never hits your price.

Stop Orders

A stop order is kind of like a booby trap. It sits idle until a stock hits a trigger price you set. Then it springs into action and becomes a market order. This is handy for locking in gains or capping losses. Just be aware, once the trap is sprung, your order will be filled at the best current price, which might have moved from the price that triggered it.