What Is a Limit Order?

Summary

A limit order is an order to buy or sell only at a specified price or better. It can help control price, but it does not guarantee that execution will happen.

Definition

A limit order is an instruction to buy or sell at a stated price or at a more favourable one, rather than accepting whatever price the market currently offers. Although the article does not define limit orders directly, its focus on execution cost, spread, and fill uncertainty makes the distinction relevant: controlling price and obtaining a fill are not the same thing. In poor liquidity or unstable pricing, a limit order may avoid paying beyond the chosen price, but the trade may not execute fully or at all. For the article's decision process, that matters because a trade is only valid if the planned entry and exit method is clear and realistically executable under current conditions.

Sources

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