What is Limit Order?
Maximum Price you could afford to pay to buy a Share (or)
Minimum Price at which you are ready to sell a share
What is Limit Buy Order?
For example, a buy limit order can be put in for $2.40 when a stock is
trading at $2.45. If the price dips to $2.40, the order is automatically executed.
What is Sell Limit Order?
For example, a sell limit order can be put in for $2.40 when a stock is
trading at $2.35. If the price dips to $2.40, the order is automatically executed.
For example, a sell limit order can be put in for $2.40 when a stock is
trading at $2.35. If the price dips to $2.40, the order is automatically executed.
What is Stop-Limit Order?
A stop-limit order is an order placed with a broker that combines the features of a stop order
with those of a limit order. A stop-limit order will be executed at a specified price, or better, after a
given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit
order to buy or sell at the limit price or better.
A stop-limit order requires the setting of two price points. The first point initiates the start of
the specified action, referred to as the stop, while the second represents the outside of the
investor’s target price, referred to as the limit. A timeframe must also be set,
during which the stop-limit order is considered executable.
For example, assume that ABC Inc. is trading at $40 and an investor wants to buy the stock once it begins to show some serious upward momentum. The investor has put in a stop-limit order to buy with the stop price at $45 and the limit price at $46. If the price of ABC Inc. moves above $45 stop price, the order is activated and turns into a limit order. As long as the order can be filled under $46, which is the limit price, the trade will be filled. If the stock gaps above $46, the order will not be filled.