Limit order


 

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Limit order

An order to buy shares up to a maximum price or sell down to a minimum price.For example an investor may place a limit order to buy shares at £12 where the current price is say £15 and falling. If the price levels at £13 and goes up again the order would not be placed. If the price fell to £12 or below, the investor's order would be placed and the maximum he/she would pay would be £12. The point about a limit order is that the client knows what his exposure is.In contrast when a client places an 'at best' order, the broker will complete the purchase at the best price available on the 'order book' at the time, and the client cannot be sure what that price is going to be.



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