Trading
Limit Order
Definition
An order to buy or sell a stock at a specific price or better. A buy limit order only executes at the limit price or lower; a sell limit order only at the limit price or higher. Offers price control but may not fill.
Related Terms
Market Order
An order to buy or sell a stock immediately at the best available price. Market orders guarantee execution but not a specific price. Best for liquid stocks where the spread is narrow.
Stop-Loss Order
An order that automatically sells a stock when it falls to a specified price, limiting potential losses. A stop-loss at $90 on a $100 stock would sell if the price drops to $90, capping the loss at 10%.
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