![]() An investor sets a limit order to sell 100 shares at $12. In this scenario, only when the stock price hits $10 or lower will the trade execute.Ī sell limit order is used by a seller and specifies that the seller will not sell a share under the price of $x per share, with $x being the limit order set by the seller.įor example, consider a stock whose price is $11. An investor sets a limit order to purchase 100 shares at $10. A limit order can be referred to as a buy limit order or a sell limit order.Ī buy limit order is used by a buyer and specifies that the buyer will not pay more than $x per share, with $x being the limit order set by the buyer.įor example, consider a stock whose price is $11. Therefore, in a limit order, if the market price is not in line with the limit order price, the order will not execute. A limit order prevents investors from potentially purchasing or selling stocks at a price that they do not want. Limit OrderĪ limit order is a trade order to purchase or sell a stock at a specific set price or better. If a stock is heavily traded, there may be trade orders being executed ahead of yours, changing the price that you pay.įor example, if an investor places an order to purchase 100 shares, they receive 100 shares at the stock’s asking price. A market order poses a high slippage risk in a fast-moving market. A key component of a market order is that the individual does not control the amount paid for the stock purchase or sale. Market OrderĪ market order is a trade order to purchase or sell a stock at the current market price. When placing a trade order, there are five common types of orders that can be placed with a specialist or market maker: 1. ![]()
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