◈ GLOSSARY · TRADING & MARKETS
Limit Order.
A definition, in plain English — with the books that teach it.
ClearValue Books · reviewed against sources ·
◈ DEFINITION
What it means
Definition
An instruction to buy at no more than a set price, or sell at no less than a set price. You trade certainty of fill for control of price — the order only executes if the market reaches your number. It's the default tool for anyone who doesn't want to get steamrolled on wide spreads or fast moves.
◈ IN PRACTICE
Example
Stock is trading at $50.05. You place a limit buy at $50.00. If the ask drops to $50.00 or below, you fill there. If the stock runs to $52 instead, your order sits unfilled — which is the tradeoff.
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