Investor.gov limit order
Family II · Orders
Not to be confused with limit order, stop limit order, sell limit order.
Investor.gov limit order is a type of order described by the U.S. Securities and Exchange Commission's investor education website, investor.gov. It directs a broker to buy or sell a security at a specified price or better, rather than at the prevailing market price. The order may execute at the limit price or a more favourable one, but it will not execute at a worse price.
How a limit order works
A limit order specifies a price ceiling for a buy or a price floor for a sell. A buy limit order can only be filled at the limit price or lower; a sell limit order can only be filled at the limit price or higher. If the market never reaches the limit price, the order remains unfilled unless the trader cancels it or the order carries a time-in-force instruction that expires it.
Execution is not guaranteed. The order may be partially filled, filled in several trades, or not filled at all. Once filled, the trade occurs at the best available price that satisfies the limit condition.
Worked example
A trader places a buy limit order for 100 shares with a limit price of $50.00.
Variations and risks
Rules for order types, time-in-force, and handling of partial fills vary by broker, market centre, and country. Some venues may not accept certain limit prices or may route orders to different execution venues. A limit order that is not filled exposes the trader to market risk: the price may move away, and the opportunity to trade at the limit price may be lost.
Often confused with
- limit order
- A limit order is the general order type itself, while an investor.gov limit order is the same concept as described on the SEC's investor education site; the visible sign is the source attribution to investor.gov.
- stop limit order
- A stop limit order combines a stop price that triggers the order with a limit price that constrains execution, whereas an investor.gov limit order has only a limit price and no stop trigger; the visible sign is the presence of two prices.
- sell limit order
- A sell limit order is a limit order to sell at or above a specified price, while an investor.gov limit order can be either a buy or a sell; the visible sign is the order side stated as sell.