Limit Order

A limit order is an instruction given to a brokerage firm to buy or sell a security, such as a stock, at a specified price or better. When placing a limit order, a buyer sets a maximum price they are willing to pay, ensuring they don't overpay in a volatile market. Conversely, a seller sets a minimum price they are willing to accept, guaranteeing they receive at least that amount for their shares. Unlike a market order, which executes immediately at the best available current price, a limit order provides price control and protection against unfavorable price movements.