LeoGlossary: Limit Order

An offer to buy or sell an asset at a specific price or better. This is in contract to a market order.

Investors and traders are constantly looking to enter and exit positions. To do this, they must place an order to be accepted by market participants. A limit orders allows the individual to set the price for the transaction.

It is best to always use a limit order. The exception is highly liquid securities or assets with a lot of volume. Market orders are effective for getting in or out of a position quickly. The price, depending upon the movement of the market, can be much different when the trade is executed.

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