What is Limit Order?
A limit order is an instruction to buy or sell a security at a specific price or better, giving you control over the execution price but no guarantee the order will be filled.
Limit Order Explained
Limit orders are essential for disciplined trading because they prevent you from overpaying or underselling. A buy limit order executes at the limit price or lower. A sell limit order executes at the limit price or higher. The trade-off is that your order may never fill if the market doesn't reach your price.
Real-World Example
AAPL is trading at $182. You place a buy limit order at $180. The order sits in the book until AAPL drops to $180 or below, at which point it executes automatically.
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