What is Limit Order?

What is Limit Order?

A limit order is an order you place on the order book with a specific limit price. It will only be matched when there are orders placed by another investor that reaches your limit price.

When the current price (A) drops to the order’s price (B) or below, the order will be executed automatically if the buy price is above or equal to the current price. Therefore, the buying price of a limit order must be lower than the current price. For example:

1. The current price on orbix exchange is 950 (A). If you place a buy limit order with an order price of 900 (B), the order will not be executed until the price drops to 900 or below.
2. In contrast, if you place a buy limit order with an order price of 1,200, which is above the current price (A), the order will be filled immediately, and the executed price will be around 950 instead of 1,200.

When the current price (A) reaches the order’s limit price (B) or above, the order will be executed automatically if the sell price is below or equal to the current price. Therefore, the sell price of limit orders should be set above the current price. For example: 

1. If the current price is 900 (A) and you place a sell limit order with a limit price of 950 (B), the order will not be executed until the price reaches 950 or above. 
2. If you place a sell limit order with a limit price of 600, which is below the current price (A), the order would be filled immediately at around 900 instead of 600.