What is a limit order?

Limit orders allow you to set a price at which you want to buy or sell a stock. Unlike market orders, your purchase or sale will go though only when the price reaches the level that you specify. For example, you want to buy ABC Inc. at $50. The stock is currently trading at $51, so you set a limit order to buy at $50.

What is the difference between a buy and sell limit order?

A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute. A limit order can only be filled if the stock’s market price reaches the limit price.

Do limit orders save money?

You’re trading a high number of shares (for example, more than 100) Limit orders can help you save money on commissions, especially on illiquid stocks that bounce around the bid and ask prices. But you’ll also save money by taking a buy-and-hold mentality to your investments.

Why is my limit order not filling?

A limit order can only fill if a security has liquidity. If the security does not have enough shares trading at the specific price you placed, your order may not fill. This is most common for larger orders placed on low-volume securities. Due to volatility, a stock on the day of its IPO may have difficulty filling due to rapid price fluctuation.