No ask offers

I've been watching the L2s of a few fairly illiquid stocks lately, and occassionally the screen will show no Ask offers for the stock in question.

In this situation, assuming it isn't an error with my screen, what would occur if I were to come along at that instant and place a market buy order? I'm assuming it would just sit there unfilled until an Ask offer showed up, and then immediately fill at whatever price is offered, since a market order attempts to buy at the best available price at the time.

I assume this opens the door wide open for someone to gouge me with no limit order in place. My question is this: by just how much can they gouge? Is there some sort of protection mechanism in place to prevent me from being completely ripped off by a huge mark-up of the stock price (IE: The stock is trading at $5 and the person offers it to me at $10)?

If that could happen, it'd almost be enough to make me never want to touch a market order again.

A market order to buy, is pretty much as you understand it. It is simply an instruction to buy the stock at the best prce available, if the best price on offer is way above the recent value of the stock so be it. Out of interest what stock where you watching?

I can't recall which stock it was -- my watch list is pretty big. It might have been either CALM or TSTY though from looking at their recent volume.

Are you sure that there are no safeguards in place? If there were none, wouldn't you expect to frequently see illiquid stocks with enormous differences between the 52wk highs/lows if this was a common activity employed by sneaky individuals?

This is a possible concern of mine since I currently use a deep discount broker which allows 200 trades per month as market orders which I make use of, and occassionally some of the stocks which I buy are fairly illiquid.

Are you sure that there are no safeguards in place? If there were none, wouldn't you expect to frequently see illiquid stocks with enormous differences between the 52wk highs/lows if this was a common activity employed by sneaky individuals?

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Common sense is your safeguard, would you walk into a shop that displayed no prices and pick up several items, and throw them on the cashiers counter with your credit card? So why place an order for a stock that says your priority is to own the stock regardless of price, essentially that is what a market order is, the only requirement of the broker is to fill you at the best price available relative to your position in the queue. Personally I don't think I have seen a stock with no bid or ask, but then since I don't look at stocks trading under 1 mill a day, that's no surprise

I can't recall which stock it was -- my watch list is pretty big. It might have been either CALM or TSTY though from looking at their recent volume.

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These are Nasdaq stocks, it is the responssibility of the MM's to maintain continous bid / ask quotes so i don't know. I certainly would advise anyone against using market orders against illiquid stocks.