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Finance Glossary

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Limit Orders

Definition:

This is a method for buying or selling securities wherein the buyer sets a limit on how much he will pay or how little he will sell a given security. So aptly named. A buyer might be looking at GOOG trading at $500 a share but only wants to pay $490 a share for it so she'd type in the "limit" box on her E*TRADE account 490, 100 shares. If GOOG trades down to that level during the time at which the limit trade is set, then she is the proud new owner of 100 shares of GOOG. If it never gets there and takes off screaming to $600, then she's out of luck and never got the ride.

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