Limit Order

An order to buy shares up to a maximum price or sell down to a minimum price. Can also be called good till cancelled, remaining valid until the limit is reached or the trade cancelled. 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 were to fall to £12 or below, the investors 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.