A limit order allows you to buy or sell a stock or F&O (Futures and Options) only once it reaches a specified price. This order type gives you control over the trade execution price, helping you avoid buying at a higher price or selling at a lower price than desired.
How Limit Orders Work:
- Buy Limit Order: Executes at the limit price or lower. For example, if you set a buy limit order at ₹100, it will only execute if the price drops to ₹100 or below.
- Sell Limit Order: Executes at the limit price or higher. For example, if you set a sell limit order at ₹150, it will only execute if the price rises to ₹150 or above.
Note: A limit order is only valid for the day it is placed. If it does not execute by the market close, it will automatically be canceled.