Buy limit
Family II · Orders
Not to be confused with buy stop, limit order, stop limit order, sell limit order.
Buy limit is a conditional order to buy at a set price or lower, entered below the current market price. It rests in the order book until the market trades down to the limit price, at which point it becomes eligible for execution. If the market never reaches that price, the order remains unfilled until cancelled or expired.
How a buy limit works
A buy limit is placed at a price below the current ask. It will not execute at a worse price than the limit; if the market gaps below it, the fill may occur at a better price. The order can be filled partially or in full, depending on available liquidity at that level. Many venues apply time-in-force conditions such as day-only or good-till-cancelled, and these vary by broker and market.
Worked example
Related terms
A buy limit is distinct from a buy stop, which is placed above the market and triggers on an upward move. It is a specific type of limit order on the buy side. A stop limit order combines a stop trigger with a limit price. Its sell-side counterpart is the sell limit order.
Often confused with
- buy stop
- A buy stop is placed above the current market price and triggers a market buy when the price rises to it, whereas a buy limit is placed below the market and buys on a decline; the visible sign is the order's position relative to the current price.
- limit order
- A limit order is the general category for buying or selling at a specified price or better, while a buy limit is specifically the buy-side version; the visible sign is the order side, buy versus sell.
- stop limit order
- A stop limit order uses a stop price to activate a limit order, while a buy limit is active immediately and rests in the book; the visible sign is the presence of a separate stop price.
- sell limit order
- A sell limit order is placed above the current market price to sell on a rise, whereas a buy limit is placed below the market to buy on a fall; the visible sign is the order direction, sell versus buy.