Limit order
An instruction to buy at or below a set price, or sell at or above it, which controls the price you trade at but not whether the trade happens.
A limit order names a price. A buy limit order will only be executed at the limit price or lower; a sell limit order only at the limit price or higher. If the market is already better than the limit, the order fills straight away. If not, it waits in the order book until the price reaches the limit or the order expires, which may be at the end of the day or after a set period, depending on the instruction you give. Even when the price touches the limit, an order may be only partly filled if others are ahead in the queue.
Limit orders protect against paying far more, or receiving far less, than you expected, which is especially useful in illiquid shares, around the market open and in volatile conditions. The trade-off is execution risk: if the price moves away, the order may never fill and you may miss a move you wanted to catch. A limit set far from the current price is effectively a bet on a temporary swing. Limit orders are also the building block of other order types, including the stop-limit order, which becomes a limit order once a trigger price is reached.
General education, not personal financial, tax or legal advice.
Guides that go deeper
Where limit order comes up in practice.