What Is Limit Order? Meaning & Example
Definition
A limit order sets the maximum price you will pay to buy or the minimum you will accept to sell. It gives price control but may not fill if the market never reaches your price.
Related terms
A market order buys or sells immediately at the best available price. It prioritizes speed over price, so the final price may differ slightly from the last quote.
Stop-Loss OrderA stop-loss is an order that closes a position automatically if price moves against you to a set level. It helps limit losses, though fast markets can cause fills worse than the stop price.
Take-Profit OrderA take-profit order closes a position automatically once price reaches a target level. It locks in gains without needing to watch the market constantly.
What is Limit Order?
A limit order sets the maximum price you will pay to buy or the minimum you will accept to sell. It gives price control but may not fill if the market never reaches your price.
Can you give an example of Limit Order?
A limit order to buy at $48 will only execute if the stock trades at $48 or lower.