Limit Order
An order to buy or sell at a specified price or better — it may not fill at all.
Also called: limit buy · limit sell
In plain language
A limit order sets your worst acceptable price. A buy limit fills at your price or lower; a sell limit fills at your price or higher.
The tradeoff is the mirror image of a market order: you control price completely and execution not at all. If the market never trades at your level, nothing happens.
Resting limit orders are what make up the order book. When you place one away from the market, you become the liquidity someone else trades against.
Why it matters
Limit orders let you plan an entry precisely, which keeps your actual stop distance — and therefore your position size — matching the trade you calculated.
Common mistakes
- Setting a limit so far from the market that a good trade is missed for a penny.
- Assuming a limit order guarantees a fill when price touches it. You are in a queue.
- Forgetting resting limit orders exist until they fill unexpectedly days later.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
An instruction to buy or sell immediately at the best price currently available.
The live list of all resting buy and sell orders at each price level.
The instruction that says how long an order stays active before it expires.
The price at which you open a position.
A stop order that becomes a limit order instead of a market order when triggered.