Limit Order
A limit order is an order placed with a broker to buy or sell a security at a specified price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute. A limit order can only be filled if the security’s market price reaches the limit price. Limit orders provide investors and traders with more control over the price at which their orders are executed.
History of Limit Order
Limit orders have been around since the early days of the stock market. They were originally used by investors to protect themselves from large losses in the event of a market crash. Limit orders were also used to ensure that investors would not miss out on potential profits if the market moved in their favor. Over time, limit orders have become an important tool for investors and traders who want to control the price at which their orders are executed.
Comparison Table
| Order Type | Execution Price |
|---|---|
| Market Order | Market Price |
| Limit Order | Limit Price or Better |
Summary
A limit order is an order placed with a broker to buy or sell a security at a specified price or better. Limit orders provide investors and traders with more control over the price at which their orders are executed. For more information about limit orders, investors and traders can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Market Order
- Stop Order
- Stop-Limit Order
- Fill or Kill Order
- Good-Til-Cancelled Order
- Immediate or Cancel Order
- All or None Order
- Trailing Stop Order
- Market-on-Close Order
- Limit-on-Close Order
