Priority of out of hours sell limit vs market order

Question

Say a stock price is $10. I own a number of stock and one evening decide to sell because of bad news, so I place an order outside of trading hours, anticipating it will execute the next morning.

1. Create a sell limit order, limited at say $5.
2. Create a market sell order

A few questions:

• Are orders queued, such that a market order made later in the evening would get executed after my sell limit order?
• Would a sell limit order affect the negotiated opening price of the stock?
• Any advantage of doing a market vs sell limit, assuming the price remains above $5?

Answer 1

Are orders queued, such that a market order made later in the evening would get executed after my sell limit order?

Yes and no. Orders are Queued - but there are passive and active orders. Market orders are active and executed the moment they come in. Limit orders are passive and rely on SOMEONE ELSE HITTING THEM.

Would a sell limit order affect the negotiated opening price of the stock?

Look up the exchange rules. Yes, this is exchange specific.

Any advantage of doing a market vs sell limit, assuming the price remains above $5?

Better price. Market orders always at least cross the spread, limit orders per definition do not.

Answer 2

Instead of a "sell order" I think it helps to use the words "bid" and "ask." A bid is a person saying "I will buy for this price" and an ask is "I will sell for this price." There's also the last settlement price, which is whichever price at which the last transaction was made.

When you make a market order, you're committing to meeting the highest bid or lowest ask to the last settlement price: Selling at market likely moves the price down to meet the highest bid. Buying at market likely moves the price up to the lowest ask.