Mcdonald's stock is now selling for 190 per share. Kim wants to buy 100 shares but only if she can do so at 180 or less. she should place a limit order.
What do you mean by limit order?
A limit order is a form of order that allows you to buy or sell a security at a certain price or better.
- For purchase limit orders, the order will be executed only at the limit price or a lower one, while for sell limit orders, the order will be executed only at the limit price or a higher one.
- This requirement gives dealers more influence over the pricing at which they trade.
A purchase limit order guarantees that the investor will pay that price or less.
- While the price is guaranteed, the order is not guaranteed to be filled, and limit orders will not be executed unless the security price meets the order qualifications.
- The order is not completed if the asset does not reach the stipulated price.
Learn more about limit orders here,
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