Placing a limit order

You place a limit order in order to buy or sell a stock at a price you specify - the limit - or better. A limit order to buy would be executed at the limit or lower, while a limit order to sell would be executed at the limit or higher. You always place a buy limit order below the current stock price, and a sell limit order above the current stock price.

For example, suppose you wish to buy 500 shares of stock at GBP 30 or better. You place an order with your broker to "buy limit at GBP 30". If a seller who wishes to trade at GBP 29.80 is found, your order is executed, since this betters the limit of GBP 30. If a seller is found at GBP 30 then your order would also be executed at the limit price of GBP 30. However, no execution will take place above this amount.