- A limit order guarantees that the order will be executed at or better than a certain price level.
- However, the execution of a limit order is not guaranteed.
- Limit orders control the strike price, but can result in missed opportunities in rapidly changing market conditions.
- Limit orders can be used in conjunction with stop orders to prevent large losses.
- A limit order is usually valid for a certain number of days (i.e. 30 days) until the order is executed or until the trader cancels the order.