instruction to execute an order for a stock only at a specified price or better. The broker continues the order until a specified date or until the customer terminates it. Assume an investor places a limit order to buy at $10 or less a stock now selling at $11. If the stock goes up to $20, the broker will not execute a buy order; if it falls to $10, the broker will execute a buy order immediately. Note that the broker does not buy a stock for the broker's own account. The broker brings a buyer and seller together and executes a transaction for a commission. Only a dealer (or a broker-dealer acting in its capacity as a dealer) ever actually buys or sells-i.e., takes an inventory position.
order to buy or sell a specified amount of securities at a given price. The order usually specifies a time period but it may have an indefinite expiration, such as a "good til canceled order."
order to buy or sell a security at a specific price or better. The broker will execute the trade only within the price restriction.
order to buy or sell a security or commodity at a specific price or better. The broker will execute the trade only within the price restriction. For example, a customer puts in a limit order to buy XYZ Corp. at 30 when the stock is selling for 32. Even if the stock reached 30.01 the broker will not execute the trade. Similarly, if the client put in a limit order to sell XYZ Corp. at 33 when the price is 31, the trade will not be executed until the stock price hits 33.
