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Definition of the Week: Limit Order

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Limit Order

What is a limit order?

A limit order is an order placed with a brokerage to buy or sell a specific number of shares at a certain price or better. This type of order gives the investor opportunity to control the price at which they buy or sell a stock.

stockbrokers.com Explains Limit Orders

The limit order provides the investor with a tremendous amount of protection. Limit orders are helpful on every stock, but they are absolutely necessary on low volume stocks that have unpredictable price swings. A limit order can also allow the investor to control the amount of time their outstanding order is open. Limit orders are sometimes slightly more expensive than a market order, but some brokerages now have market and limit orders for the same fee. A limit order is a great way to take the reigns and have control over your next buy or sell.

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