What Is a Limit Order/Limit Buy/Limit Sell?
A limit order, also known as a limit buy or limit sell, is an order placed with a broker to purchase or sell a security at a specific price. This type of order allows investors to control the exact price they are willing to pay for securities and helps them avoid paying more than they want. Limit orders can be used in both buying and selling transactions.
When placing a limit order, investors must specify the maximum amount that they are willing to pay (limit buy) or receive (limit sell). If the market reaches this specified price before their order is filled, then it will be executed at that rate; however if the market does not reach this level then no transaction will take place. Limit orders provide traders with greater control over their trades by allowing them to set predetermined prices which may help protect against sudden changes in market conditions.