Definition of A Limit?

A limit is a type of order relating to the trading of an asset. It is placed with a broker and indicates a price level at which the owner of the asset wishes to exit their position. This will limit their profits to a certain amount, but also mean they do not have to monitor their positions as actively as if they had no limit order at all.

Limit orders are most frequently used in conjunction with stop orders on assets with extreme fluctuation and volatility.

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