Walk limit order
Family II · Orders
Not to be confused with limit order, stop limit order, sell limit order.
Walk limit order is an order type that combines a limit price with an automatic repricing mechanism. When the market moves away from the order's current price, the order is adjusted to a more aggressive level, but never beyond the specified limit price. This behaviour is designed to increase the chance of execution while maintaining price protection.
Mechanics
A walk limit order is typically used for large orders that might otherwise rest unfilled as the market moves. The order is assigned a limit price, which is the worst price at which the trader is willing to buy or sell. As the best bid or offer changes, the order's price is automatically adjusted to a more aggressive level, provided that the new price does not exceed the limit price.
For a buy order, the price may be increased as the best offer rises, up to the limit. For a sell order, the price may be decreased as the best bid falls, down to the limit. If the market moves beyond the limit price, the order remains at the limit and may not execute.
Worked example
Assume a trader places a walk limit buy order for 1,000 shares with a limit price of $50.10. The current best offer is $50.00. The order is initially priced at $50.00.
The order will not pay more than $50.10 per share, even if the market continues to rise.
Availability and variations
Walk limit orders are not universally available. Their availability, naming, and exact repricing rules vary by broker, exchange, and jurisdiction. Some venues may only offer similar functionality through pegged orders or discretionary orders. Traders should check the specific order types and parameters offered by their broker or venue.
Often confused with
- limit order
- A limit order has a fixed price and does not automatically reprice as the market moves; the visible sign is that a walk limit order's price changes with the best bid or offer, while a limit order's price remains static.
- stop limit order
- A stop limit order becomes active only after a stop price is triggered and then places a limit order, whereas a walk limit order is active immediately and reprices within its limit; the visible sign is the presence of a stop price that must be reached before the limit order is submitted.
- sell limit order
- A sell limit order is a fixed instruction to sell at a specified price or better and does not adjust automatically, while a walk limit order can be either a buy or sell and reprices as the market moves; the visible sign is that a sell limit order's price is static, whereas a walk limit order's price changes.