Sell limit order
Family II · Orders
Not to be confused with limit order, stop limit order, buy limit order.
Sell limit order is a conditional order that sets a minimum acceptable selling price. It rests in the order book until the market reaches that price or better, at which point it may execute. If the market never trades at or above the limit, the order remains unfilled unless cancelled.
Mechanics and execution
A sell limit order specifies a limit price and a quantity. The order is eligible to execute only at prices equal to or above the limit. When the market trades at the limit or higher, the order may fill in whole or in part, depending on available liquidity. Unfilled portions remain active until the order is cancelled or expires. Sell limit orders are also called take-profit orders when used to close a long position at a target price.
Worked example
An investor holds 100 shares and wants to sell at no less than $50 per share. They place a sell limit order at $50.
Key characteristics
- Price floor: The order will not execute below the limit price.
- No guarantee of fill: If the market never reaches the limit, the order remains unfilled.
- Placement: Typically placed above the current market price when selling.
- Time in force: May be day-only or good-till-cancelled, depending on the broker and order type.
Often confused with
- limit order
- A limit order can be either a buy or a sell instruction, whereas a sell limit order is specifically the sell side; the visible sign is the order side (buy or sell) in the order ticket.
- stop limit order
- A stop limit order becomes active only after a stop price is triggered, while a sell limit order is active immediately; the visible sign is the presence of a stop price in addition to the limit price.
- buy limit order
- A buy limit order sets a maximum purchase price and is placed below the market, whereas a sell limit order sets a minimum selling price and is placed above the market; the visible sign is the order direction (buy versus sell).