Stock Market Glossary
Limit order
Order that is only executed at a specific price or better.
In brief: Order that is only executed at a specific price or better.
Meaning in practice
Limit orders guarantee price but not execution. They are the standard tool for price-conscious trading – in contrast to market orders, which are executed immediately but at the available market price.
Context for investors and traders
For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.
