Limit order
An order to buy at a specified price or lower, or sell at a specified price or higher — only fills if the market reaches that price.
Limit orders sit at a price and wait for the market to come to them. They guarantee the price you'll pay (or better) but don't guarantee the fill — if the market never touches your level, your order doesn't execute.
Used for: entry orders when you want to wait for a specific level, target orders (which are limit orders to exit a position at a defined price), and adding to existing positions at specific prices. Generally don't use limit orders as stops — see stop order.
Related terms
- Market order
An order to buy or sell immediately at the best available price — guaranteed fill, no guarantee on price.
- Stop order
An order that becomes a market order once a trigger price is hit — most commonly used to limit losses on an open position.
- OCO (One-Cancels-Other)
A pair of orders linked so that when one fills, the other automatically cancels — the foundation of a bracket order.
- Bracket order
A protective pair of orders — a stop loss and a profit target — attached to an entry as a one-cancels-other group.