Limit Order definition

A Limit order is an order to buy or sell an instrument at a specified price or better. While a Limit order ensures that if the order fills, it will not fill at a price less favorable than your limit price, it does not guarantee that the order will be filled.

Here’s How it Works

Buy Limit Order: An investor sets the maximum price they’re willing to pay. The order will only execute at that price or lower.
Sell Limit Order: An investor sets the minimum price they’re willing to accept. The order will only execute at that price or higher.

Example

An investor wants to buy a stock currently trading at $50 but only if it drops to $48.
- They place a buy limit order at $48.
- The order will only fill if the price falls to $48 or below.
Alternatively, an investor owns a stock at $50 and wants to sell if it reaches $55.
- They place a sell limit order at $55.
- It will execute only if the price hits $55 or higher.

Key Points

Gives control over price, but no guarantee the order will fill if the market doesn’t reach the limit price.
Often used when an investor is not in a rush and wants a better price than what’s currently available.

Limit Order

Here’s How it Works

Example

Key Points

Information on Other Interactive Brokers Affiliates

Interactive Brokers Canada Inc.

Interactive Brokers Australia Pty. Ltd.

Interactive Brokers Hong Kong Limited

Interactive Brokers India Pvt. Ltd.

Interactive Brokers Securities Japan Inc.

Interactive Brokers Singapore Pte. Ltd.

Here’s How it Works

Example

Key Points

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