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| *Ostroff, Fair and Company>>>Investing |
What is the difference between limit and stop orders? |
thx in advance. STOP ORDER: An order to buy or sell a security when its price surpasses a particular point, thus ensuring a greater probability of achieving a predetermined entry or exit price, limiting the investor's loss or locking in his or her profit. Once the price surpasses the predefined entry/exit point, the stop order becomes a market order. Also referred to as a "stop" and/or "stop-loss order". LIMIT ORDER: An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled. Source(s): http://www.investopedia.com/ |
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