A limit order is an order placed with a brokerage to execute a buy or sell transaction at a set number of shares and at a specified limit price or better. It is used to specify the maximum price to be paid or the minimum price to be received, ensuring more control over the trading process. Unlike market orders, limit orders are not guaranteed to execute, but they ensure that if the order does execute, it will only be at the specified price or a more favorable one.
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Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
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