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.
• A sell limit order will be executed only at the limit price or a higher one.

The price is guaranteed, but the filling of the order is not. Limit orders will be executed only if the price meets the order qualifications.