Market-on-Close Definition

A Market on Close (MOC) order is entered before the market closes and the transaction takes place at the day’s closing price.

The US stock exchanges process these orders. Check with your broker for exact instructions on how to enter them.

Extra Insight:

Due to using historical end-of-day data, a ”this bar at close” order in backtesting behaves similar to a Market-on-Close order because it takes today’s closing price. A key difference is that the backtest actually “sees” the closing price before placing the order. I wish I could do that in real life!

I use the MOC or “this bar at close” order in backtesting only for timed exits because the decision to exit in this case doesn’t depend on the closing price, only the number of days in the trade.

For large orders in thinly traded markets, a live market order might move the live market, resulting in a different closing price than would have occurred without the order – an effect that’s not modeled with historical end-of-day data.

Read a professional’s report here that live MOC orders often execute at the published closing prices.

A small private trader is unlikely to move a large liquid market. By sticking to high volume stocks, its not only possible to backtest market orders, its also possible to understand more about the differences between market orders and limit orders via backtesting.

Updated: 11/12/08.