The online trading can be done in many ways. One of the most popular ways is limited order which is suitable for the investors which have the limited budget to invest in stock. Do you know about limited order? If you have visited online trading sites, you probably know what the limited order is. In the stock market, the limit order is a trade that enables you to buy a share either to the minimum price or the maximum price whenever you want to sell or buy a share in the stock market.
In today stock market, the main difference between limit order and market order is that the latter trade cannot be guaranteed by the stock broker whether it will be executed or not in the trading. For example, if you want to purchase 1000 shares on the online stock market, your order will be executed based on what you price that you want to order. If you only want to buy the share no more than $25 per share that the price of share is $30 now, so your order will be only executed if the share price is equal or less than $25. Unless the share’s price falls into $25 per share, so the trade is not being executed.
The limit order is one of the best trades that you will be safer from the risks of lost during the trading. For your information, there are some considerations that you need to know before placing a trade option for limit order which can describe as the followings:
– The order that you request might not be executed if the stock price is fall to the price that you want to order.
– The brokers will execute your order based on the order they receive. It might be possible that your price will not be filled due to the price of shares will be fluctuated either above or below your order before your brokers receive your order.
– The order will be done at the price you order. Whenever the stock price falls suddenly to the price that is below your limit order, you will lose for few dollars. For example, if your limit order is $40 and the price of stock is $30 dollar; so, you will lose $10 per share.