Quick Definition

A limit order is an instruction to buy or sell a security at a specified price or better.

Examples

• 1An investor places a limit order to buy 100 shares of XYZ Corp at $50 per share. The order will only execute if the stock's price reaches $50 or lower.
• 2A trader sets a limit order to sell 200 shares of ABC Inc at $30 per share. This order will only be executed if the stock's price rises to $30 or higher.
• 3During a volatile market day, an investor uses a limit order to purchase shares at a lower price, avoiding overpaying during price spikes.
• 4A limit order is used to sell a stock at a target profit price, ensuring the investor locks in gains without monitoring the stock constantly.

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