Market Order Feature Increases Transaction Efficiency In Capital Market

JAKARTA - Director of Trade and Regulation of Share Members of PT Bursa Efek Indonesia (IDX) Irvan Susandy stated that the Market Order feature increases transaction efficiency in the Indonesian capital market.

Irvan explained, Market Order is a sale offer and/or purchase request carried out by Stock Exchange Members based on the volume set by their customers based on the best price in the market.

"This feature allows investors to execute orders quickly and without the need to enter prices specifically, thereby increasing efficiency and speed in the implementation of transactions," said Irvan as quoted by ANTARA, Monday, May 13.

Irvan continued, Market Order has several advantages, including facilitating the execution of orders at market prices at instantaneous times, increasing the potential for transactions, and potentially matching at the best price.

In addition, he continued, it has higher priority than the limit order in the Jakarta Automated Trading System (JATS) system, and has risk management in the form of a maximum limit sweep of 10 price fractions from the best price.

"Since its launch, there have been more than 80 percent of Exchange Members who have implemented this Market Order feature in their order delivery system. Based on 2022 and 2023 data, there will be an increase in the use of Market Orders in 2023 by 56 compared to 2022 (based on Market Order volume)," said Irvan.

Furthermore, Irvan explained that Market Order is an order type that has higher priorities than the limit order type.

In the continuous-auction trading mechanism, he continued, Market Orders will be instantaneously encountered, while in the call-auction trading mechanism, Market Orders have priority to be met more importantly than limit orders.

In addition, Market Orders can also be used in pre-opening sessions, pre-closing sessions and call-auction sessions in the Special Monitoring Board.

"The Market Order types available in the JATS system include Fill and Kill (FAK), Fill or Kill (FOK), and Market to Limit (MTL), each of which has its own characteristics," said Irvan.

To take advantage of the Market Order, he explained that investors can directly use this feature through online trading applications owned by Stock Exchange Members, where investors only need to enter the volume or number of desired lots of shares without having to input the price specifically.

"By continuing to carry out socialization and education activities to Exchange Members, investors, and other market players, we hope to increase understanding and awareness of Market Orders, so as to increase the ease of transactions on the IDX," said Irvan.