Market Order Increases Liquidity And Efficiency In Capital Market

Illustration. (Photo: Doc. Antara)

JAKARTA - Since its launch by the Indonesia Stock Exchange (IDX) on December 6, 2021, the Market Order is considered to provide easy transactions for investors.

It is known, the market order is the type of order that allows investors to enter selling offers and/or purchase requests based on the volume set by their customers and will be brought together at the best price in the market. As of September 2024, the IDX recorded a total transaction value implemented through a market order mechanism of 11 trillion.

Nicholas Darmawan, Equity Research Semesta Indovest Sekuritas said the market order could significantly increase market liquidity due to the transaction process which directly matches the best price in bid or ask positions, thus providing higher efficiency for Exchange Members and market participants.

"I see the benefits of the market order to increase market liquidity because orders or orders for market players are directly matched at current prices and the next price with a note that there is adequate bid/ask, thereby increasing efficiency for market participants," Nicholas said when contacted by reporters, Tuesday, November 5.

In addition to the broad benefits for investors, Nicholas added, this feature is very beneficial for traders who buy and sell quickly, because it provides higher convenience and efficiency in executing transactions in the capital market.

"Traders who carry out buying and selling activities quickly benefit more, due to high efficiency for selling or buying," he added

Although this feature provides many advantages, Nicholas said that investors still need to be careful of potential risks, especially the risk of execution at unwanted prices.

"How to minimize these risks? That is by paying attention to the number of lots available in bids/asks, there is a bit of no transaction at unwanted prices," he continued.

Nicholas also provides several tips for investors in optimally utilizing the Market Order feature. He suggested that the market order feature be used in markets that have high liquidity and adequate transaction volume.

Seeing the benefits of the market order feature, Nicholas hopes that the IDX can continue to strive to provide a fair and equitable trading system for all market players. He also wants the IDX to be able to present the best technology that not only support transaction efficiency, but also be able to develop a better trading ecosystem in the Indonesian capital market.

"I hope the Exchange can provide a fair trading system for market players so that and the best technology to support and at the same time develop the continuity of Indonesia's Stock Exchange trading," he concluded.