Limit orders give you more control over the price you buy and sell shares for. You enter the exact number of shares you want and the price you will pay for them (e.g. 5 shares at $50 each). If the market price matches yours, or goes lower, your order will be filled.
Why use limit orders?
You control the buy/sell price and are not impacted by market price fluctuations. You only buy or sell the shares at the price you specify.
What you should know about limit orders
- You can only buy and sell full shares.
- Limit orders are automatically cancelled at the end of each market day
- The full amount of your order is immediately deducted from your available balance until it's filled, you cancel it, or it's automatically cancelled at the end of the market day.
- Your order may not be filled if the market price doesn't reach your desired price.
Still not sure? Find out the difference between Market orders and Limit orders.