Saudi Exchange began implementing an updated market order mechanism on October 4, 2026, in the Main Market and Nomu-Parallel Market, in a move aimed at improving execution efficiency and making better use of available market liquidity. What is a market order? A market order is a buy or sell order executed immediately at the best available prices in the order book, without the investor specifying a particular price. This type of order is typically used when an investor prioritizes speed of execution over obtaining a specific price. How did the previous mechanism work? Previously, a market order was executed against the quantity available at the best price only. For example, if an investor wanted to buy 10,000 shares and only 3,000 shares were available at the best price, those 3,000 shares would be executed, while the remaining quantity would be converted into a limit order at the price of the last executed portion. What has changed? Under the new mechanism, a market order can now be executed across multiple price levels, within a range of up to five price ticks starting from the best available price. This allows the order to access additional liquidity available at nearby price levels, rather than being limited to the quantity available at the best price alone. What happens if the entire order is not executed? Once the maximum permitted range is reached, or if no additional quantities are available within the specified range, the remaining unexecuted quantity is converted into a limit order at the price of the last execution. What is the purpose of the update? Saudi Exchange said the update aims to: Increase the quantities executed immediately. Improve the use of available market liquidity. Reduce the likelihood of large portions of orders remaining unexecuted. Enhance the efficiency of the trading mechanism. Support market depth and improve the investor experience. Does the update apply to all markets? No. The update applies only to shares listed on the Main Market and Nomu-Parallel Market. It does not apply to the derivatives market, which will continue to use the current mechanism. Why has the update attracted investors' attention? The mechanism used to execute orders directly affects the speed of trade execution and the efficiency of access to liquidity, particularly for stocks with gaps between price levels or limited trading volumes.
