Limit Order

An order to buy or sell a stock at a specific price or better.

What Is a Limit Order?

A limit order sets the maximum price you're willing to pay (for a buy) or the minimum price you're willing to accept (for a sell). Unlike market orders, limit orders guarantee your price but don't guarantee execution — if the stock never reaches your limit price, the order won't fill.

Types of Limit Orders

• Buy limit: "Buy AAPL at $170 or lower." The order only fills if the price drops to $170 or below.
• Sell limit: "Sell AAPL at $200 or higher." The order only fills if the price reaches $200 or above.

Limit Orders Around Earnings

Many experienced traders use limit orders strategically around earnings. They might place a buy limit below the current price to scoop up shares if a stock drops on a miss, or a sell limit above to take profits if the stock spikes on a beat. This removes emotion from the trading decision.