What is a Market on Open Order? Definition, Formula, and Example
A market on open order is a market order that executes at the opening auction price of a stock, guaranteeing a fill at the first trade of the regular session.
What is a Market on Open Order?
A market on open order, abbreviated MOO, is an order type that executes at the opening auction price of a stock on the primary exchange. Unlike a standard market order that routes to the continuous market, a MOO order sits in the opening auction and fills at the single price that clears the most shares when the regular session begins at 9:30 AM ET. The order guarantees execution but not a specific price.
The MOO order exists for traders who need to establish or exit a position at the opening print. It captures the opening auction's liquidity, which is often substantial because many institutional orders, index rebalances, and retail flows execute at the open. The order must be placed before the exchange's cutoff time, typically 9:28 AM ET for NYSE and Nasdaq.
How the Market on Open Order is Identified and Executed
The MOO order does not have a formula. It relies on the exchange's opening auction mechanism. The exchange collects all MOO orders, along with limit on open orders and market maker quotes, from 4:00 AM ET until the cutoff. At 9:30 AM ET, the exchange calculates the opening price that maximizes matched volume.
The execution price is the official opening price of the stock. If the stock has no opening trade because of a halt or an imbalance, the MOO order may be rejected or rolled into the continuous market. The order is not eligible for pre-market trading; it only participates in the opening auction.
Worked Example: MOO Order on NVDA
Assume NVDA closed the prior session at $120. Overnight, the company announces a major AI chip deal. Pre-market trading pushes the stock to $125. You want to buy at the open, so you place a MOO order at 9:20 AM ET.
At 9:30 AM ET, the opening auction matches buy and sell orders at $124.50. Your MOO order fills at $124.50. The fill is guaranteed, but the price is $4.50 higher than the prior close and $0.50 below the pre-market high. If you had placed a regular market order at 9:31 AM, you might have received a price of $124.80 or worse, depending on the spread and momentum.
A MOO order is also used for selling. If you hold NVDA and want to exit at the open due to negative news, a MOO sell order guarantees you participate in the opening auction. The fill is the opening price, which may be below the prior close if the news is bad.
When Traders Use a Market on Open Order
Traders use MOO orders when they want certainty of execution at the opening auction and do not want to chase price in the first seconds of continuous trading. The order is common for earnings reactions, macroeconomic news releases, and index rebalancing days. Institutional traders use MOO orders to execute large blocks without moving the price in the continuous market, because the opening auction absorbs substantial size.
Day traders also use MOO orders to establish positions based on overnight news or pre-market analysis. The order avoids the risk of a standard market order filling at a stale quote during the first second of trading, when spreads widen and liquidity is thin.
Limitations and Common Misconceptions
The MOO order does not guarantee a price near the prior close. Gaps can be massive, especially after earnings or major news. The opening auction price can be 10% or more away from the previous close, and the MOO order fills at that price without protection.
A common misconception is that the MOO order is the same as a market order placed at 9:30 AM. It is not. A market order placed at 9:30 AM routes to the continuous market and may fill at the opening price or at a slightly different price depending on the exchange's matching engine. The MOO order is guaranteed to participate in the auction itself.
Another limitation is the cutoff time. Exchanges require MOO orders to be entered by 9:28 AM ET. Missing the cutoff means the order is rejected or converted to a regular market order, which may execute at a worse price.