# Limit order

> An order to buy or sell at a specified price or better, which controls the price but does not guarantee the order will fill.

Source: https://www.quantisnow.com/glossary/limit-order
Topic: Glossary / Market structure
Also known as: limit orders, limit buy, limit sell, buy limit order, sell limit order
Last updated: 2026-10-27

A limit order is an instruction to buy or sell a security at a specified price or better. A buy limit executes only at the limit price or lower, and a sell limit only at the limit price or higher.

## How it works

If the limit price is marketable (a buy limit at or above the current ask, for example), the order fills immediately up to that price. Otherwise it rests in the order book, visible on [Level 2](https://www.quantisnow.com/glossary/level-2), until the market reaches it, it expires, or you cancel it.

Common settings:

- **Time in force.** Day orders expire at the session's close. Good-'til-canceled (GTC) orders persist, often for weeks or months depending on the broker.
- **Extended hours.** Most brokers require limit orders in [pre-market](https://www.quantisnow.com/glossary/pre-market-trading) and after-hours sessions.
- **Partial fills.** A resting order can fill in pieces as shares trade at your price.

Exchanges generally give priority by price, then by time, so an order at the same price as many others waits in line.

## Why it matters for traders

Limit orders protect against bad fills in fast or thin markets, and they let traders capture part of the [bid-ask spread](https://www.quantisnow.com/glossary/bid-ask-spread) by buying at the bid instead of the ask. They are essential around news, at the open and in small caps.

The tradeoff is missed trades. A buy limit just below the price can sit unfilled as the stock runs away. A resting limit order can also fill at the worst moment: a GTC buy at $40 on a $45 stock will execute if the stock gaps down to $30 on bad news. The fill is near $30, better than the limit, but you now own a stock that just collapsed.

## Example

Hypothetical Copperline Energy (ticker CPLE) is quoted $24.90 by $25.10. A trader places a buy limit for 200 shares at $24.95. If a seller hits that bid, the order fills at $24.95, saving 15 cents per share, or $30, versus buying at the ask. If the stock instead climbs to $26 without trading at $24.95, the order never fills.

## FAQ

### What happens to a limit order if the price is never reached?

It remains open until it expires under its time-in-force setting or you cancel it. Nothing is executed.

## Related terms

- [Market order](https://www.quantisnow.com/glossary/market-order.md): An order to buy or sell immediately at the best available price, which guarantees execution but not the price.
- [Stop-loss order](https://www.quantisnow.com/glossary/stop-loss-order.md): An order that becomes a market order to sell (or buy) once a stock trades at a specified stop price, used to limit losses.
- [Bid-ask spread](https://www.quantisnow.com/glossary/bid-ask-spread.md): The gap between the highest price a buyer will pay (the bid) and the lowest price a seller will accept (the ask) for a security.
- [Level 2 quotes](https://www.quantisnow.com/glossary/level-2.md): Market data showing the full depth of bids and offers at multiple price levels, not just the best bid and ask.
- [Pre-market trading](https://www.quantisnow.com/glossary/pre-market-trading.md): Trading in US stocks before the 9:30 a.m. ET open, typically from 4:00 a.m. ET, with thinner liquidity and wider spreads.

## On Quantisnow

- [Stock exchanges explained](https://www.quantisnow.com/guides/stock-exchanges-explained)
- [Options chains](https://www.quantisnow.com/options)
- [Options chain basics](https://www.quantisnow.com/guides/options-chain-basics)
- [Risk/reward calculator](https://www.quantisnow.com/tools/risk-reward-calculator)
- [Stop loss calculator](https://www.quantisnow.com/tools/stop-loss-calculator)
- [Stock profit calculator](https://www.quantisnow.com/tools/stock-profit-calculator)
- [Stock average cost calculator](https://www.quantisnow.com/tools/average-cost-calculator)