What is a Limit Order?

Unlike a market order, which is sent to be executed at the best price available in the market at the time the order is placed, a limit order is sent to be executed at a specific price or better. The advantage of a limit order, is that you have price certainty, meaning that you know that the worst price where your order will be filled, is the price you specify in the order. If the market moves so that you would be filled at a price that is worse than the price that you have specified, then the trade will not execute. If however the market moves so that you would be executed at the exact price you have specified or better, then the trade will be executed.