What is a Buy Limit Order?
A buy limit order is an order to purchase a security at or below a given price.
How Does a Buy Limit Order Work?
Limit orders generally have deadlines (i.e., the latest date on which the trade may be executed before it is canceled) and they usually cost more to execute thanorders. Electronic Communication Networks (ECNs) are often used to execute limit orders because they match trades by price very quickly.
Why Does a Buy Limit Order Matter?
There are all kinds of limit orders. For example, if you wanted to sell your Company XYZ holdings for no less than $10 per share, you could place a $10, meaning that your can execute the at prices no lower than $10 per share.
Buy limit orders are common because they can limit losses and liquidity or face the risk of missing a major run-up in the price of the .profits by giving investors some sort of specified purchase or sale price. This makes them very useful in low-volume or high-volatility markets, but is important to that a buy limit order not be executed if the does not meet the order requirements. This can be troubling for investors who need immediate
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
I recently met someone who didn't think that he needed a financial advisor. It took two phone calls from me and a referral from a family member to convince him to hear...Read More →
The "sure thing" is passive income's holy grail. Unfortunately, when it comes to any type of investing and income...Read More →