# Limit order

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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.

## 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.

## 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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

## 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.

References in periodicals archive ?
Using multiple communication channels that include smartphone applications and direct phone calls, customers can place market orders (MKT), limit orders (LMT), stop loss/profit orders (STP), limit stop loss/profit orders (STP LMT), market on close orders (MOC), limit on close orders (LOC), trail orders, and trail stop limit orders.
By staying up to date with the latest updates in the markets, Cryptocay will aim to give its users the most competitive rates for Limit Orders and flexibility for Market Orders.
Extended Hours Overnight orders, which must be limit orders only, remain active up to 24 continuous hours and expire at 8 p.m.
This paper examines how the clustering of limit orders on round pricing increments affects the execution prices of marketable orders and, thereby, contributes to temporary deviations from price efficiency.
In its note to clients, UBS wrote: "In the event that extreme market moves occur, giving rise to limited liquidity in certain currencies, we may not be able to fill limit orders or take profit orders at the levels, or using the methodologies, expected in normally-functioning markets."
Furthermore, August's event reinforces the importance of using limit orders whenever placing an ETF trade.
Today, HFTs post a majority of the limit orders that are matched in this fashion and result in executed trades.
Perfect for traders who prefer market execution but still want to trade on a MetaQuotes platform, FxPro MT5 also features a number of updates to its predecessor, including more timeframes, drawing tools, buy and sell stop limit orders, tick chart trading and full market depth.
Limit orders can be placed on holidays and during non-market hours too.
The committee argued that such an approach reinforces incentives to post displayed limit orders "and hence encourages the liquidity and price discovery roles of the market".
* Only use limit orders. A limit order is an order to trade at a specified or better price.

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