"Limited orders" typically refer to a type of order in financial trading, where an investor sets a specific price at which they want to buy or sell an asset. Here’s a breakdown:
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Limit Order: This is an order to buy or sell a security at a specified price or better.
- Buy Limit Order: Placed at a price below the current market price, the order will only execute if the market price drops to the limit price or lower.
- Sell Limit Order: Placed at a price above the current market price, the order will execute only if the market price rises to the limit price or higher.
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Benefits:
- Investors gain control over the price at which they're willing to buy or sell, which can prevent unfavorable trades at market prices.
- It can also help in executing trades during volatile market conditions.
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Limitations:
- There is no guarantee that the order will be executed; if the market price does not reach the limit price, the order may remain unfilled.
- They may expire, depending on the time frame set by the investor or the brokerage firm.
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Usage: Limit orders are often used in various types of markets, including stock trading, foreign exchange, and commodities.
If you were referring to a different context or a specific type of limited orders, please provide more detail!