understanding financial jargon
A Limit Order is any order given to a stock broker which places limits or conditions on a trade. In other words the investor is not allowing the broker the discretion to place their order at the current market price. A stop loss is a form of limit order, where the investor tells the broker to place a sell order only if the share price falls to, or below a specific value.
An investor can also use limit orders on the buying side of a trade, where they tell the broker to buy shares only when the price falls below a specified price. By doing this the investor is hoping to purchase the shares at a more favourable price than currently available.
As with other future orders such as trailing stop losses, many brokers will allow limit orders to exist only for a short period (often up to 30 days) before such orders expire unfulfilled.
What to do if you need more help
If you need more help with your specific commercial loan, mortgage or insurance requirement please speak to a professional financial adviser.
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