Business, Legal & Accounting Glossary
The price specified in a limit order is called the limit price. Limit orders instruct the broker to execute a buy or sell order only at the limit price or better. A buy limit order will not be executed above the limit price. Conversely, a sell limit order will not be executed below the limit price. Unlike market orders where the investor can’t control the price at which the order is filled, a limit order assures the order is filled within a range defined by the limit price. A limit price outside of the current bid-ask spread is said to be “away from the market.” Limit price orders may not be filled immediately or filled at all. In futures trading parlance, the limit price is the maximum price change up or down allowed in one trading day for a particular contract.
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This glossary post was last updated: 10th February, 2020 | 1 Views.