What is the limit order?
shares are in most cases of a matter of pure chance. Unforeseen events, such as weather or wars, may cause shares prices. It is a good idea to set the limits of your activity, so you don't burn.
Even if you buy and sell your own stocks, you have to rely on at least one more person or entity to eventually make the transaction. This is for this person or entity that you report your desire to buy or sell at a certain price. You decide for any price for which you are willing to settle or achieve, and then tell the agent of the transaction what the price is. This is called limit order .
The main advantage of the limit order is that you as an investor can control the maximum or minimum price at which your money is spent or earned. If you enter in your limit order that your marginal price is $ 100 per share, you will know the transaction limit. You usually determine how many shares you want to buy or sell. Using the same IF NAS exampleYou melt a limited price of $ 100 per share and stock limit of 100 shares, then spend the most or get $ 10,000.
Your limit order is a guarantee of a significant loss of money. However, it is not guaranteed to be manifested. Stock price may never reach the level of your limit order; If this is the case, the limit order has not been filled in and either remains in force or is canceled after some time.
For the most part, you will find a limit command on the stock exchange than on the dirt markets. The main reason is the faster rate of fluctuation and the overall speed at which prices are rising or falling to stock exchanges. Ironically, however, due to the intense nature of the fluctuations up or down in the price on the stock exchange, however If you set the price of the limit on the limit order so low that only the barrels of profit will be bought at this level, then after your supply after the bottom ofNot only hunting will be immersed.
One of the disadvantages of the limit order is that it will block you at a certain price. You may want to get rid of shares and set a marginal order that you think will surely interpret all your shares. However, if the price never reaches the level of your limit order, you are stuck with your stock until you have canceled the limit order. Especially in the case of the stock you really want to get rid of, the limit of the limit may not be the best idea.