![]() ![]() As the stock was falling in price, your order was executed. Imagine the bank's CEO resigns unexpectedly or some other type of bad news is reported, and U.S. If there is a sudden drop in the stock price, your order will be executed at your limit price.This problem is far less common now with online trading than it was when people used to call their broker to place trading orders. It is possible that the stock you are interested in buying (or selling) will reach your limit price yet your trade will not be filled because the price fluctuated above (or below) your limit before the trade could be carried out. Limit orders are executed in the order in which they are received.As a result, your order may never be executed. The stock price may never fall (or rise) to the limit you’ve established. ![]() There are three considerations you should take into account before placing a limit order: ![]() If the stock falls to that price, your order should be executed. You believe the stock is overvalued at its current price of $53.48 and you don't want to pay more than $51, so you place a limit order set to execute at $51 or less. The primary difference between a market order and a limit order is that the latter order may not be executed. A limit order allows you to limit either the maximum price you will pay or the minimum price you are willing to accept when buying or selling a stock, respectively.
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