Now that you know that limit orders are basically conditional orders, let’s dive into the details of a buy limit order 🤔
The most important definition to walk away with is. . .
Buy limit Order = purchasing a stock only once it reaches a certain price ✍️
Once the buy limit order is fulfilled, meaning the stock order is placed, an investor has successfully made a very specific and controlled investment 😎
BUT, limit orders are not guaranteed ❌
Even if the stock price reaches the limit price, sometimes the limit order will not be fulfilled if the price moved too quickly 🤔
This is rare, but important to keep in mind if you are trading riskier, volatile stocks ✍️
Limit orders give investors more control, but more specifically, control over the price ⚡
The investor does not control order fulfillment (if the order ever goes through) 🤔
Some investors use buy limit orders to only purchase a stock if others do so as well 💰
Our previous Apple limit order was an example of this 🍎
Investors also use buy limit orders to catch their favorite stocks on sale 🤑
For example, if we wanted to buy Apple, but only if it dipped below a certain price, then a buy limit order could be great 🚀
Overall, buy limit orders can be used for both catching stocks on sale and more hesitant purchase before a stock goes up 🤑
It’s always important to do your research since buy limit orders are not guaranteed 🤝
