limit order

Limit Order

An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled.

Investopedia Commentary

Limit orders typically cost more than market orders. Despite this, limit orders are beneficial because when the trade goes through, investors get the specified purchase or sell price. Limit orders are especially useful on a low-volume or highly volatile stock.

Related Links

The Basics Of Order Entry
Understanding Order Execution

See also: Buy, Discretionary Order, Limit Order Book, Market Order, Order, Sell, Stop Order, Volatility

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 1.