A limit order lets you set the maximum price you’ll pay to buy, or the minimum you’ll accept to sell.
When to Use a Limit Order
- Price Control: If you have a specific price in mind, and you’re not in a rush, a limit order lets you get the price you want.
- Avoid Surprises: Especially in a volatile market, limit orders help prevent you from overpaying if prices swing quickly.
The Tradeoff
Your order might not get filled at all if the market price never reaches your limit.
Limit Order vs. Market Order
- Market Order: Fills instantly, but you might get a worse price.
- Limit Order: Gives you price control but might take a while to fill (or might not fill at all).
The Big Idea: Limit orders are about getting the best possible price, even if it means waiting a bit longer for your trade to get filled.
