Quick definition An order to buy or sell at the closing price of the session. The order participates in the closing auction of the exchange. What it is A MOC order is a market order with execution delayed until the official close of the session. Instead of executing immediately during the regular session, the order is held and entered into the closing auction. It executes at the closing price determined by the auction process. Why it matters MOC orders are used to execute at the close without the risk of intraday price movements. A fund manager who wants to ensure execution at the day's closing price uses a MOC order. The order is guaranteed to fill at the official closing price, which is the price used for all end-of-day calculations. MOC versus Market Order A market order executes immediately during the regular session at the best available price. A MOC order waits until the close and executes at the auction price. The MOC trader sacrifices timing control for the assurance of executing at the official day-end price. The closing auction On US equities exchanges, the closing auction runs for 10 seconds before the official close. Orders submitted before the cutoff (typically 3:50 PM ET for equities) are included in the auction. The auction matches buy and sell orders at the price that would execute the maximum volume. Practical example A portfolio manager needs to rebalance a fund at day's end to match a benchmark. The manager submits MOC orders for shares that need to be bought or sold. At the close, all MOC orders are gathered into the closing auction and execute at the official closing price. Regulatory role MOC orders are important for market surveillance and price discovery. The closing auction is a venue for large institutional trades at the official day-end price, which is then used for fund valuations, index calculations, and regulatory reporting. Comparison to Limit-on-Close (LOC) A limit-on-close (LOC) order also executes at the close but includes a price limit. The LOC order will only execute if the closing price is at or better than the specified limit. See also - At-the-open (OPG) - Limit-on-close (LOC) - Market order - Closing cross
