Limit Up

See: Limit Order.

In general, limit orders describe a pre-set instruction to buy or sell a stock (or other asset) at a specific price. These are often used to prevent stocks or commodities (or whatever) from moving too far too fast.

You hold a stock at $50 a share. You suffer from narcolepsy and sometimes miss parts of the day with sudden sleeping spells. You want to be able to take profits in your stock if it reaches $55 a share.

So, you set a limit order at that price. If it gets to $55, your broker will automatically sell.

The concept also comes into play on an exchange-wide level. It's especially common on commodity exchanges. Many commodities have specific daily limits dictating how far their prices can move during a given session. If it rises by its daily limit, the commodity is said to "limit up."

See: Limit Move. See: Limit Down.