In trading, a limit-on-open (LOO) order is a type of order made by an investor to a broker. This order requests that the broker buy or sell specified securities if the price is equal or better than a specified limit price when an exchange opens. If the price of a share is not equal to or more favorable than the limit price at the time that the exchange opens, the order is canceled.
Example: An investor wants to buy shares in a stock listed on an Asian stock exchange at a maximum of 31 Swiss francs per unit. They place a limit-on-open order with their broker to buy the stock as soon as the exchange on which it is listed opens, but only if they can buy it at 31 francs or less. If the share is not being sold for 31 francs or less when the exchange opens, the order is automatically canceled and the broker does not buy the shares at all.
LOO orders can be used by investors who want to buy a security as soon as the exchange on which it is listed opens because they expect its value to increase over the course of the trading day, while at the same time avoiding spending more on the security than they are willing or able to.
See also: Limit-on-close order