When we go shopping in a physical store, most of the time you are making 1 time purchase 🛍️
For example, if you are buying a T-shirt, you just pay for it once!
Some digital services offer subscriptions, like Netflix and Disney 🥳
These are recurring payments 👏
But, there’s one type of order that’s very unique to investing! 🤩
And that is a 🥁limit order 🥁 or known informally as a conditional order.
The informal name helps us understand what a limit order is the most 🗒️
So, a limit order is only buying a stock on a condition ✍️
And that condition is usually the price ⚡
So, a limit order is when you set a maximum price you're willing to pay for a security, or a minimum price at which you're willing to sell 💰
When you place a buy limit order, the security will only be bought at the limit price or lower 💰
Similarly, when you place a sell limit order, the security will only be sold at the limit price or higher 🤑
But what happens if the price never hits the limit you set? 🤔
Well, then the order never goes through! 😵
Limit orders are often viewed as more advanced trading, so they are by no means necessary to include 📁
We’ll learn more about why you might make a limit order in the next lessons 💰
But, it’s always great to learn as you progress, so you can continue to make the best decisions as an investor 💪
