Order types
Limit orders
3 min
A limit order lets you name your price: buy at no more than X, or sell at no less than Y. It will only execute at your limit price or better — never worse.
How it behaves
- A buy limit at R$ 30 will only fill at R$ 30 or cheaper. If the market is above R$ 30, your order waits in the book until the price comes down to you.
- A sell limit at R$ 35 will only fill at R$ 35 or higher.
The trade-off is the mirror image of a market order: you get price control, but you give up certainty of execution. If the price never reaches your limit, your order simply never fills.
A worked example
Suppose a stock is trading at R$ 31 and you think R$ 30 is a fair entry. You place a buy limit at R$ 30. Two things can happen:
- The price dips to R$ 30 and your order fills at R$ 30 (or better) — exactly as planned.
- The price keeps rising and never touches R$ 30 — your order stays unfilled and you miss the move.
When to use it
- Almost always for less liquid stocks, to protect yourself from slippage.
- When you have a specific price in mind and are patient.
- To place a resting order at a level you would be happy to buy or sell.
The limit order is the workhorse of disciplined investing — it forces you to decide your price in advance, instead of chasing whatever the screen shows.
This content is for educational and informational purposes only and is not investment, financial, tax or legal advice. Trading and investing carry risk, including the possible loss of capital. Any performance shown by third-party tools is hypothetical and not a promise of future results. Do your own research and consider professional advice before making any decision.