limit order

Limit Order

An order placed with a brokerage to buy or sell a predetermined amount of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled.

Notes:

Limit orders typically cost more than market orders. However limit orders are beneficial because when the trade goes through, you get your specified purchase or sell price. Limit orders are especially useful on a low-volume or highly volatile stock.

See also: Buy, Discretionary Order, Limit Order Book, Market Order, Order, Sell, Stop Order, Volatility

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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 (OB), stop order.