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Finance Dictionary and Glossary of Investment Terms
Limit Order
Definition 1.
An order placed with a brokerage to buy or sell a predetermined amount of shares at a specified price or better than the specified price. Limit orders also allow an investor to limit the length of time an order can be outstanding before cancelled.
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Definition 2.
An order to buy a stock at or below a specified price, or to sell a stock at or above a specified price. For instance, you could tell a broker "buy me 100 shares of XYZ Corp at $8 or less" or "sell 100 shares of XYZ at $10 or better" The customer specifies a price, and the order can be executed only if the market reaches or betters that price. A conditional trading order designed to avoid the danger of adverse unexpected price changes.
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Definition 3.
An order to a broker to buy a specified quantity of a security at or below a specified price, or to sell it at or above a specified price (called the limit price). This ensures that a person will never pay more for the stock than whatever price is set as his/her limit. This is one of the two most common types of orders, the other being a market order. opposite of no limit order.
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Definition 4.
When you instruct your broker to buy shares for you at or below a certain price, or sell shares at or above a certain price, you''ve entered a limit order. Limit orders reduce the risk that an order will be filled at a price you don''t like, and since most stocks move around a little on any given day, you can often get an extra 1/8 of a point in your favor just by entering a limit order and being patient. The down side, of course, is that by waiting for your price the stock you want gets away from you, or the stock you want to unload just keeps falling. The opposite of a limit order is a market order, in which the broker is instructed to execute the trade at any market price available.
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Definition 5.
An order to buy or sell a security at a customer-specified price; a customer order to buy or sell a specified number of shares of a security at a specific price. (See stop-loss order)
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