What is a limit order in financial markets?

A limit order in the financial markets is a direction to purchase or sell a stock or other security at a specified price or better. This stipulation allows traders to better control the prices at which they trade. A limit can be placed on either a buy or a sell order: A buy limit order will be executed only at the limit price or a lower price.

What is an alternative to a limit order?

The alternative to a limit order is a market order, which calls for a trade to be executed at the prevailing market price without any price limit specified. A limit order guarantees that an order is filled at or better than a specific price level. A limit order is not guaranteed to be filled, however.

What is a non-marketable limit order?

Non-marketable limit orders are outside the current price range. They usually are sent to a wholesaler or to the exchange for execution. Stops are a trigger to submit an order.

What is a market order?

A market order is an order to buy or sell a stock at the market's current best available price. A market order typically ensures an execution, but it doesn't guarantee a specified price. Market orders are optimal when the primary goal is to execute the trade immediately.