Glossary
Limit order: definition
A limit order instructs the broker to trade only at the price you state or better. It is how you refuse to chase. The cost of that refusal is that the order may sit unfilled.
In practice
Buy limits sit at or below the market. Sell limits sit at or above. A limit does not become wiser because the app draws it on a chart. In a fast market your limit may fill only in part, or may fill and leave you with a position you must manage. Limits do not protect a position you already have unless you have placed them as an exit and the market trades there.
A worked example
You want a share trading at 20 and will pay 19.50. A limit at 19.50 buys only if a seller meets you. If the share runs to 22 you own nothing, which is the outcome you accepted.
Related
Sources and review
Last reviewed: 2026-10-13. Next review due 2027-04-13. Status: editorial review of this page, not a live verification of every third-party fee.
Author: WiT Markets Editorial, Editorial desk. The WiT Markets editorial desk writes explanatory pages, comparison context and research notes. It separates sourced facts from items that are not confirmed, and it does not provide personal recommendations.
Reviewed by: WiT Markets Research Review.
Primary and regulatory sources
- Investor.gov — checked 2026-10-13
- FINRA — checked 2026-10-13