How Does a ‘Market-on-Close’ (MOC) Order Manage Slippage Risk near the End of a Trading Session?
A Market-on-Close (MOC) order is executed at the official closing price of the trading session. While it doesn't eliminate slippage, it eliminates the uncertainty of the execution price, as the closing price is a known, standardized benchmark.
Traders use MOC orders to minimize the risk of volatility-driven slippage that can occur in the final moments of trading as liquidity thins out, ensuring execution at a known price, albeit one that is determined by the closing auction.
