A pegged-to-market order is a type of order in the financial markets that is dynamically pegged to the current market price rather than having a fixed price. This order is designed to maintain a specific price differential, either a percentage or a fixed amount, from the current market price. As the market price fluctuates, the pegged-to-market order adjusts accordingly.

The primary advantage of a pegged-to-market order is its adaptability to changing market conditions. Traders can use this order type to automatically adjust their buy or sell prices in relation to the prevailing market rates. This flexibility can be particularly beneficial in volatile markets where prices can change rapidly. By pegging the order to the market, traders aim to achieve better execution prices and increase the likelihood of order fulfillment. It provides a way for traders to stay competitive and responsive to price movements, enhancing their overall trading strategy in dynamic market environments.