Limit Order
Category: business
An order to buy or sell a stock only at a specific price or better.
A limit order provides control over the execution price. If you place a "buy limit" at $50, the order will only execute if the stock price drops to $50 or lower. This prevents the "slippage" that often occurs with market orders during periods of high volatility or thin trading volume.
Common Examples
- We utilized a limit order to enter our position, ensuring we wouldn’t be filled at a price higher than our algorithmic entry threshold.
- During the market open, we always prefer limit orders to avoid the price volatility that characterizes the high-volume "opening bell" session.