Limit Order
An order to buy or sell only at a chosen price or better, which may not fill at all.
A limit order sets the worst price you'll accept. Place a buy limit at $30,000 and it executes only at $30,000 or lower; a sell limit at $35,000 fills only at that price or higher. You control the price but give up certainty of execution. If the market never reaches your level, nothing happens.
Limit orders rest in the order book and add liquidity, which is why exchanges often charge lower maker fees for them. Traders use them to enter on dips, take profit at targets, or avoid the slippage that comes with market orders.
Related terms
An instruction to buy or sell immediately at the best price currently available in the market.
Order BookA live, ranked list of all outstanding buy and sell orders for an asset on an exchange.
Bid PriceThe highest price a buyer is currently willing to pay for an asset on the order book.
Ask PriceThe lowest price a seller is currently willing to accept for an asset on the order book.