Orders & execution
Limit order
An instruction to trade only at a specified price or better, accepting that it may never fill.
How it works
A limit order gives you control of price and gives up control of execution. A buy limit fills at your price or lower; a sell limit at your price or higher.
It is the correct default for anything illiquid, anything outside market hours, and any order large relative to normal volume.
Where it misleads people
A partially filled limit order leaves you with an unintended position size. Deciding in advance what you will do if only half fills is part of using them properly.
Worked example
A buy limit at $99.50 with the market at $100.10 waits. If the price never falls to $99.50, nothing happens — which is either protection or a missed trade, depending on what happened next.
Related terms
- Market orderAn instruction to trade immediately at the best price currently available, whatever that is.
- Fill-or-killAn order that must execute in full immediately, or be cancelled entirely.
- Good-till-cancelledAn order that stays live across sessions until it fills or you cancel it.
- Bid-ask spreadThe gap between the highest price anyone will pay and the lowest price anyone will accept.
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Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.