Limit Order

Limit order

An order to buy a stock at or below a specified price, or to sell a stock at or above a specified price. For instance, you could tell a broker "buy me 100 shares of XYZ Corp at $8 or less" or "sell 100 shares of XYZ at $10 or better" The customer specifies a price, and the order can be executed only if the market reaches or betters that price. A conditional trading order designed to avoid the danger of adverse unexpected price changes.

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limit order

An order to execute a transaction only at a specified price (the limit) or better. A limit order to buy would be at the limit or lower, and a limit order to sell would be at the limit or higher. Limit orders are used by investors who have decided on the price at which they are willing to trade. Compare market order. See also elect, or better, stop order.

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Limit Order

An order to a broker to buy or sell a security at a certain price. That is, a limit order is not an immediate order; rather, it orders the broker to hold the security until the desired price is reached. For example, if stock A is trading at $50 per share, an investor may give his/her broker an order to buy stock A at $35 per share. The limit order may have a time limit on it, or it may remain open until filled. It is also called simply a limit.

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Limit order. A limit order sets the maximum you will pay for a security or the minimum you are willing to accept on a particular transaction.

For example, if you place a limit order to buy a certain stock at $25 a share when its current market price is $28, your broker will not buy the stock until its share price reaches $25.

Similarly, if you give a limit order to sell at $25 when the stock is trading at $20, the order will be filled only if the price rises to $25.

A limit order differs from a market order, which is executed at the current price regardless of what that price is. It also differs from a stop order, which becomes a market order when the stop price is reached and the order is executed at the best available price.

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Limit Order

What Does Limit Order Mean?

A type of order placed with a broker specifying the intention to buy or sell a stated number of shares at a specified price or better. Limit orders also enable investors to limit the length of time an order can be outstanding before being canceled. Limit orders are sometimes referred to specifically as a buy limit order, or a sell limit order. A limit order is the opposite of a market order.

Investopedia explains Limit Order

Limit orders are beneficial because when the trade is executed, investors get the specified purchase or sell price or better. Limit orders are suitable for low-volume or highly volatile stocks.

Related Terms:
• Ask
• Bid
• Market Order
• Stop Order
• Stop-Limit Order