I'm just introducing myself to the different order types in ordering stocks, and I don't understand the purpose of an MOC order. In what scenario would making this order be useful or propitious?
With this type of order (market on close), you participate in a special "closing auction" rather than paying a bid-ask spread as with a normal market order. This can reduce trading costs (slippage).
Suppose you have backtested a strategy with trades at reported daily closing prices. As long as your orders are small compared to market volume, you can expect to get the same execution price (the reported close) whether you buy or sell, whereas normally you'll pay a slightly higher price to buy (the ask) than you receive to sell (the bid).
I actually didn't know about the "closing auction" concept for mocs, until I learned about it on this list !!!– FattieFeb 3, 2021 at 10:42