Why is My Stock Market Order Not Getting Executed? Check the Top 3 Reasons

When you place an order to buy or sell stocks, you usually get immediate confirmation. The stock exchange updates your trade history, and the status appears in real-time on your Order Book. Additionally, you will receive an email confirmation to your registered account. All these intimations make it easy to track the transaction.

However, sometimes, your order may not go through. This can happen even if you place it successfully. Now, please be aware that this could happen for several reasons, such as low liquidity (not enough buyers or sellers), price fluctuations, or hitting the daily price limit for that stock. These issues can prevent your order from getting executed.

In this article, let’s check out the top three most common reasons causing your stock market order to not get executed.

• When a company's stock hits the "lower circuit limit," there are not enough buyers. This makes it difficult to execute sell orders.
• If there is a high demand for stock but limited sellers are available, your stock market order might not get executed due to a "first come, first serve" system.
• To improve your chances of order execution, you can place an after-market order or a pre-market order.

Sometimes, a company’s stock price falls sharply due to bad news. In this case, the stock may keep hitting its “lower circuit limit”. For the unaware, it represents the lowest price the stock can fall to in a day. When this happens, there are usually not enough buyers interested in buying the stock. This effect is felt even more by “penny stocks”, which are often less liquid.

Let’s understand this situation better through an example:

• Say there is a small-cap company listed on the stock market.
• Immediately, there is bad news that the company is about to report a major financial loss.
• As a result, investors start panicking.
• The stock price of the company begins to drop rapidly.
• It hits the “lower circuit limit” for the day.
• Now, there are only a few buyers interested in purchasing the stock.
• With limited liquidity, it becomes difficult for sellers to find buyers.
• As a result, trading comes to a halt.
• Stock market orders are not getting executed for those trying to sell their shares.

If there’s a lot of demand for a stock and many people are placing buy orders, your order might not get executed if only a few sellers are willing to sell their holdings. Please note that in stock exchanges, orders are matched based on a “first come, first serve” system. So, if there are many orders ahead of yours, they must be completed first before your order can go through. Usually, this system delays or prevents your trade from happening if there are too many earlier orders.

Now, as a solution, you can even move ahead in the queue. Let’s see how:

• Place an After Market Order (AMO)
  An AMO is an order you can place after regular trading hours, usually after 3:45 PM. You can place a market order, which gets filled at the current market price. Alternatively, you can even set a limit order with a specified price limit.
  However, please note that market orders have a higher chance of being executed because they will be matched with any available price. Currently, AMOs are placed between 3:45 PM to 8:57 AM for NSE and 3:45 PM to 8:59 AM for BSE.
• Place an order during the pre-market session
  The pre-market session starts at 9:00 AM. It allows traders to place orders before the regular market opens. By placing a market or limit order during this time, you can significantly increase the chances of your order getting executed. This happens because trades start getting matched before the main session begins.
  Be aware that pre-market orders are often given priority over AMOs since they are closer to regular trading hours. But you have to act quickly to take advantage of this small window.
  Next, it is worth mentioning that even though placing an AMO or a pre-market order can improve your chances, there is still no guarantee that your stock market order will get executed. This applies to all types of brokers.

Low liquidity means there are not enough buyers or sellers in the market for a particular stock. This makes it difficult to complete a trade and causes your stock market order to not get executed. For example, say you want to sell shares of a company, but very few people are interested in buying them. Now, it is possible that your order may not get executed because there aren’t enough buyers willing to take your shares at your asking price.

Similarly, if you want to buy a stock but there aren’t enough sellers, your order might remain pending. Low liquidity is often seen in less popular or smaller stocks (such as penny stocks), where trading volume is low.