Buy limit order
Family II · Orders
Not to be confused with limit order, stop limit order, sell limit order.
Buy limit order is a conditional order to purchase an asset at a set price or lower. It is placed below the current market price and will only execute if the market falls to that level or below. Until then, it rests in the order book as unfilled.
How a buy limit order works
A buy limit order specifies a maximum purchase price. The order is placed below the current market price and waits in the order book. If the market trades at or below the limit price, the order may be filled at that price or better. If the market never reaches the limit, the order remains unfilled until cancelled or expired.
Execution is not guaranteed: the market must trade at the limit price for a fill to occur. Partial fills are possible when only part of the order quantity is available at the limit price.
Worked example
Uses and variations
A buy limit order is used to enter a long position at a specific price or to add to an existing position on a pullback. It can also be used to scale into a position at multiple price levels.
Brokers may apply different order types, time-in-force policies, and fees to limit orders. These details vary by broker and market, so the exact behaviour of a buy limit order is not universal.
Often confused with
- limit order
- A limit order can be either a buy or a sell instruction, whereas a buy limit order is specifically a purchase instruction; the side of the order (buy versus sell) is the visible sign.
- stop limit order
- A stop limit order becomes active only after a stop price is triggered and then places a limit order, while a buy limit order is active immediately at its limit price; the presence of a separate stop price is the visible sign.
- sell limit order
- A sell limit order is an instruction to sell at a specified price or higher, placed above the current market price, whereas a buy limit order is a purchase instruction placed below the market; the direction (buy versus sell) and position relative to the market are the visible signs.