What Is a Market-on-Close Order?
The final minutes of a trading day work differently than the hours before them, and an order tied to that closing moment inherits all of that difference.
The short answer
A market-on-close order is an instruction to buy or sell a security at whatever price is determined by the exchange’s closing auction, rather than at the price available when the order is placed. It has to be submitted before a cutoff time ahead of the close, and from that point the trader has no further control over the exact execution price — it’s set by the auction process itself, based on all the buy and sell interest gathered for that moment.
How a closing auction actually works
Rather than continuously matching buyers and sellers throughout the day, many exchanges close out the session with a single auction that collects a batch of orders and determines one price meant to reflect the balance of supply and demand at that instant. Market-on-close orders, along with other closing-eligible orders, are pooled together and matched at that single clearing price. This differs from the ordinary flow of trading, where prices can shift continuously as individual trades occur throughout the day.
Why the submission deadline matters
Because the auction needs time to aggregate orders before determining a price, market-on-close orders generally have to be entered before a specific cutoff, often a number of minutes ahead of the actual close. Missing that deadline typically means the order doesn’t participate in the closing auction at all. This is a meaningful structural difference from a regular market or limit order, which can be placed and executed at essentially any point while the market is open.
Why the price isn’t known in advance
The whole point of the instruction is to accept the closing price, whatever it turns out to be, rather than a price visible at the moment of submission. That price can move meaningfully between when the order is entered and when the auction actually clears, especially if late-arriving orders shift the balance of buying and selling interest. Someone using this order type is deliberately trading price certainty for the specific benefit of matching the official close — often because that price is used as a reference point for tracking performance, such as comparing results against a benchmark.
Comparing it to a market-on-open order
A closely related instruction, the market-on-open order, applies the same basic idea to the start of the trading day instead of the end, executing at the price set by the opening auction. Both share the trait of surrendering price control in exchange for participating in a specific, formally structured auction rather than the continuous market. Choosing between them typically comes down to whether the closing price or the opening price is the more relevant reference point for a given purpose.
The takeaway
A market-on-close order hands over price control in exchange for a direct link to a specific, formally determined price at the end of the trading day. That can be useful when the closing price itself is the point — for performance tracking, for matching a trade settlement reference, or simply for the structural predictability of the auction process — but it’s a different tool than an order meant to capture a price known and visible at the moment it’s placed.