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 Association considers necessary to take measures for ensuring supply those volumes that are declared by retail radiators in accordance with demands for the limited volume of oil products, and to enter state regulation of the limit prices of fuels and lubricants for wholesale suppliers with marginality establishment between wholesale and retail price within 30%.
He said: "The sharp retreat in oil prices and lower imported metals prices is easing the pressure on manufacturers' margins and giving them increased scope to limit prices to win business.
Japan's second-largest automaker plans to limit prices of the revamped Insight to around 2 million yen to better compete with rivals like Toyota Motor Corp.
23) Overall, however, the social welfare consequences remain ambiguous because if the incumbent's lower limit prices do not discourage all entry, firms protected by the price freeze will sometimes enter despite having higher costs than the incumbent.
Judge Breyer expressed concern in Barry Wright that if above-cost prices like Pacific's could be predatory and hence illegal, such a rule would likewise ban limit pricing (Scenario #1) because limit prices also exclude rivals by deterring their entry.
Again, Baumol's proposal gives no incentive to charge low limit prices during stage 1, so if entry does not materialize (as it will not in his model), consumers gain nothing from the Baumol rule.
From the vantage point of overall wealth maximization, the advantages of this rule are ambiguous if the incumbent does not charge low enough limit prices to bar all entry, because some less efficient firms may enter.
The decision grew out of a lawsuit by a gasoline dealer against his supplier, which had sought to limit prices by requiring the dealer to rebate to the supplier any excess over the allowed markup of 3.
Like Wizard, Wizard PRO is available through Instinet's Newport(TM) and Instinet Trading Portal([R]) front-ends and allows traders to set limit prices and start and end times for trades, as well as choose among four styles--passive, normal, aggressive and super-aggressive--depending on the desired execution timeframe.
Kazakhstan has set the limit prices for electricity purchase and formalized them in legislation, he explained.
Wizard, which is available immediately through Instinet's Newport(TM) and Instinet Trading Portal([R]) front-ends, allows traders to set limit prices and start and end times for trades, as well as choose among three stylesCoaggressive, passive and normalCodepending on the desired execution timeframe.
0 offers traders more functionality, giving them the ability to execute trades to multiple execution destinations from within a single trade window, set limit prices above the national bid or offer, execute basket trades of multiple securities from the TrendSpotter, and utilize expanded Internet access via InterNAP's network.