Buy Limit Order
An order to purchase a security at or below a specified price. A buy limit order allows traders and investors to specify the price that they are willing to pay for a security, such as a stock. By using a buy limit order, the investor is guaranteed to pay that price or better, meaning that he or she will pay the specified price or less for the purchase of the security.
While the price is guaranteed, the filling of the order is not. In other words, if the specified price is never met, the order will not be filled and the investor may miss out on the trading opportunity.
A buy limit order ensures that negative slippage will not occur - the buyer will not get a worse price than he or she expects. Buy limit orders provide investors and traders with a means of precisely entering a position. For example, a buy limit order can be put in for $2.40 when a stock is trading at $2.45. If the price dips to $2.40, the order will automatically be executed.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Buy limit order — A conditional trading order that indicates a security may be purchased only at the designated price or lower. Related: Sell limit order. The New York Times Financial Glossary * * * buy limit order buy limit order ➔ order1 * * * buy limit order UK … Financial and business terms
buy limit order — A conditional trading order that indicates a security may be purchased only at the designated price or lower. Related: sell limit order. Bloomberg Financial Dictionary * * * buy limit order buy limit order ➔ order1 * * * buy limit order UK US… … Financial and business terms
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limit order — noun also limited order : an order to buy securities at a specified maximum price or sell them at a specified minimum price * * * Stock Market. an order to buy or sell a specified amount of a security at a specific price. Also called limited… … Useful english dictionary
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