A limit order is an instruction to buy or sell only at a specified price or better — never worse. A buy limit fills at your chosen price or lower; a sell limit fills at your chosen price or higher. In exchange for that price control you give up certainty of execution: if the market never reaches your price, the order simply sits unfilled.
That is the trade-off against a market order, which fills immediately at whatever price is available but offers no protection from an unfavourable fill. Limit orders are most useful in thin or fast-moving markets, where they cap the price you pay and shield you from slippage, and they let you set a target entry or exit in advance without watching the screen.
The catch is opportunity cost. A limit order placed too far from the current price may never execute, and a fast market can leave it behind entirely. Choosing between a limit and a market order is really a choice between controlling price and guaranteeing execution — you rarely get both.
Worked example
Placing a buy limit at $95 while a stock trades at $100 means you only buy if the price falls to $95 or below; otherwise the order never fills.
This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.
Related terms
Frequently asked questions
What does Limit order mean?
An instruction to buy or sell only at a chosen price or better. It gives price control but may never fill, unlike a market order.
Is Limit order a crypto or a stock-market term?
It applies across both cryptocurrency and traditional stock markets.
Is this Limit order definition financial advice?
No. The Market Capitalize glossary is educational — it explains terms and concepts, never a recommendation to buy or sell. See our disclaimer.