Orders and trading

Limit Order

An instruction to buy or sell a share only at a price you choose or better.

Why does it matter?

It gives you control over the price, but the trade may never happen.

How do I read it?

A limit order to buy at $50 only goes through at $50 or less. If the market never reaches that price, the order stays open or expires.

Example

A share trades at $52. You place a limit order to buy at $50. If the price drops to $50 or lower, your order goes through; if it never does, you don't buy.