Buy Limit Order

A buy limit order is an instruction by which an investor orders a securities broker to buy specific securities if and when the price of those securities falls to or below a specific limit price.

Example: You want to buy shares in a certain stock, but the most which you are willing to pay for each share is 20 Swiss francs. You place a buy limit order with a limit price of 20 francs. If the price of the stock decreases to 20 francs per share, the broker buys as many of the shares as possible at a price below your limit price.

Buy limit orders are primarily used to prevent brokers from buying assets at a price higher than what you are willing to pay for them. A buy limit order will not be filled unless it can be filled at the limit price or better.

See also: Sell limit order

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