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Market Basics

What Is a Limit Order

A limit order waits at a price better than the current one and fills only if the market comes to it. This paper shows you what it does, why it can never fill at a worse price than you wrote, how two limits behaved on one real day — one reached and filled, one never reached — and where the order waits on your platform.

Difficulty
Beginner
Reading time
6 min
Pages
7
Reviewed by
Saman Rahbar

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A hook set below the price

A limit order is an order that waits. Instead of taking the price that is there, it names a better one and sits until the market comes to it. At the open of 3 September 2026 the euro against the dollar was 1.15872. A buy limit at 1.15842 — a pip is the fourth decimal place, so that is three pips lower — says: I will buy, but only at 1.15842 or better. It is a hook set below the surface. If the price comes down to it, the trade opens there. If the price never comes, nothing happens, and the order goes on waiting until you cancel it.

Your price or better

The rule that defines a limit order is in its name: your price is the limit, and the fill can be at that price or better, never worse. If the price walks down through 1.15842 you are filled at 1.15842. If it jumps straight past it and the first price available is 1.15836, you are filled at 1.15836, which is better for you. A limit order cannot slip against you. What it can do is not fill at all.

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