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Limit Order Meaning

An order to buy or sell an asset at a specific price or better. A buy limit order will only be executed at the limit price or lower, and a sell limit order will only be executed at the limit price or higher.

Limit orders give the trader "Price Certainty." You know exactly what price you will pay, but you have no "Execution Certainty"-the price might never reach your limit, and your order might never be filled. These orders are placed on the "Order Book" and provide liquidity to the market.

Using limit orders is the standard way to avoid "Slippage." If you use a "Market Order" during a volatile period, you might end up paying 5% more than the price you saw on the screen.

By using a limit order, you protect your portfolio from unexpected price swings.

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