A limit order lets you name your price: it only executes at the price you set or better. You gain full control over what you pay or receive — but accept that the order may never fill.
A limit order is an instruction to buy or sell a stock only at a specific price or better. A buy limit at $50 will only fill at $50 or lower; a sell limit at $60 will only fill at $60 or higher. You are trading certainty of execution for certainty of price.
A market order fills immediately at whatever the current price is — speed over price. A limit order does the opposite: it guarantees the price but not the fill. If the market never reaches your limit, the order simply waits, and can expire unfilled.
If you set a buy limit too low or a sell limit too high, the price can run away without you. That “missing the trade” cost is the price of control. Many traders combine a buy limit to enter with a stop-loss order to protect the position.
Practice order timing: placing buys and sells at the right price is a skill. Drill your entries and exits with play money in the stock market simulator.
Not advice: educational content only. For authoritative basics see the SEC at investor.gov.
Related: what is a market order, what is a stop-loss order, and bid-ask spread.
A limit order is an instruction to buy or sell only at a price you set or better. A buy limit fills at your price or lower; a sell limit fills at your price or higher.
A market order fills immediately at the current price, prioritizing speed. A limit order guarantees the price but not the fill, prioritizing price control.
Yes. If the market never reaches your limit price, the order simply waits and can expire unfilled — that is the trade-off for controlling the price.
Use a limit order on volatile or thinly traded stocks, when you want to buy a dip at a set price, or when you want to lock in a target sell price automatically.