Limit price


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Limit price

Limit Price

1. The price above or below which one is willing or not willing to buy or sell a security. For example, one may wish to buy a stock if the price drops to $20 per share, hold if the price goes above $40, or sell at $30. Both cases represent limit prices. An investor tells his/her broker any applicable limit prices, by which the broker is required to abide.

2. A price of a product, especially a mass-produced product, sufficiently low so as to discourage new entry into that product's market. Monopolists set a limit price by increasing production to more than they otherwise need, which requires potential competitors to spend a greater amount in production in order to match the price. This renders competition unprofitable and maintains the monopolist's control of the market. The practice is illegal in most countries. See also: Antitrust.

limit price

The price specified by an investor for a limit order. With a limit order to buy, the price represents the highest price the investor will pay. The price of a limit order to sell represents the lowest price the investor will accept.

Limit price.

A limit price is the specific price at which you tell your stockbroker to execute a buy or sell order on a particular security.

If the transaction can be completed at that price, it goes through, but if that price is not available, no purchase or sale takes place.

The advantage of a limit order is that you won't pay more or sell for less than you want. Since your broker is monitoring the price, it is more likely that the trade will take place at the limit price than if you waited until the security reached that price to place your order.

The potential drawback of setting a limit price, which is also known as giving a limit order, is that the transaction may not take place in a fast market if the price of the security moves up or down quickly, passing the limit price.

References in periodicals archive ?
The Ministry of Energy and Coal Industry and the National Joint Stock Company "Naftogaz of Ukraine" shall provide upon request of the National Commission for the State Regulation of Energy documents and materials necessary to adjust the limit price of natural gas.
It determined that Penguin, together with four other international publishers and Apple, may have contrived to limit price competition for e-books in the EU, in breach of EU competition rules.
Prior to the new price improvements on limit orders, most traders experienced usual trading inconvenience that most of their limit entry orders always fill at the limit price even if the market price disparity approvingly through it.
Delta Adjusted is an adaptive algo that automates traders' work flow by automatically adjusting an option order limit price based on the underlying stock price movement and the traders' defined parameters.
Speaking in Novo Selo on Todorovden festivities, Stanishe said that cabinet should take up earnest measures to limit price hike of staples and energy, and to reduce the burden inflation is bringing onto the population.
The surge in demand helped to limit price falls in England and Wales to 0.
The competitive retail environment will mean stores go on doing all they can to limit price rises.
GSET's new Canadian algorithmic strategies, which are also available in the US, include GSET Sonar, which aggregates liquidity across multiple public and dark venues, GSET Sonar Dark, which aggregates liquidity across multiple dark and grey venues, GSET Stealth, which allows traders to capture all displayed and dark liquidity up to order's limit price without posting to public markets, and GSET 1Click, a streamlined product that offers a single point of access to all of Goldman Sachs' algorithmic trading strategies.
Agreements that limit price competition in the pharmaceutical sector can have severe adverse effects on public health and national budgets.
Even though you may see the market touch a limit price several times, this does not guarantee or earn the customer a fill at that price.
A report by Verdict Research, part of the Datamonitor Group, argues that falling oil and raw material prices, combined with competitive pressure from grocery discounters, will limit price increases in 2009.