Limit Order Law and Legal Definition

A limit order is an order placed with a broker to buy or sell a stated number of shares at a specified price regardless of the market price. A limit order to buy would be at the limit or lower, and a limit order to sell would be at the limit or higher. For e.g., an investor can place a limit order to sell shares of company XYZ for $150 or more, even if the stock is currently trading for $140. Similarly, an investor can place a limit order to buy shares at a lower price. A limit order can include instructions limiting the time it remains in effect.