A limit price is a specific price you set when placing an order. It indicates at what price you are willing to buy or sell. Your order will not be executed if the market price does not match your specified limit price.
A limit order is a type of order used when buying or selling securities, such as shares, certificates, or bonds. A limit order allows you to set the price at which you are willing to buy or sell.
Buy order:
In a buy order, you specify a specific price at which you are willing to buy a security. If the market price of the security reaches this price or goes lower, the buy order is executed. However, there are cases when a buy order cannot be executed, such as:
- If the market price does not reach or exceed the specified price.
- If there are not enough available securities to satisfy your order.
Sell order:
In a sell order, you specify a specific price at which you are willing to sell a security. If the market price of the security reaches or exceeds this price, the sell order is executed. However, there are cases when a sell order cannot be executed, such as:
- If the market price does not reach or fall the specified price.
- If there are no buyers willing to buy the securities at your specified price.
Limit orders, therefore, allow you to set the desired price at which you want to buy or sell. However, it is important to note that the execution of a limit order depends on market conditions and the availability of counterparties willing to trade at your specified price.
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