Question about Stock Limit Order?

Question

I want to pay no more than 21 for a stock, but I want to get the best price. If I place a limit order of 21 and the stock price happens to be 19.50, will I get the stock at 19.50 or will I be paying 21 for the stock?

To clarify - the stock is about 19.50, but it has been very volatile lately. I want to set my limit at 21, but also want to get the best price.

I am afraid to place a market order because I'm afraid it might jump above 21 before the buy is executed.

But I don't want to pay 21 if its going for 19.50.

Answer 1

The limit order at 21 is 21 OB (or better).

The only problem with a market order for a stock trading at 19.50 is that the quote is only good for 100 shares. If you place a market order for, say, 1000 shares, and it's a thinly traded volatile stock, the MM might run up the price on you, fill the last 100 at 22, and drop the price back to 19.50 if there are no other orders.

On the other hand, if you place a limit order at 21 for 1000 shares, the MM may run up the price above 21 on the first 200 - 300 and you will get a partial fill.

Answer 2

I wanted to buy a stock that was trading at 27-28 and I didn't want to pay more than 24 for it, so I put a limit at 24 and when the market dipped I got it for 23.80. You will get it around 21, it might be 21 or bellow, but I don't think it will go that low 19.50. You should set you limit order at 20 if you want to have a chance to go bellow 20.

Answer 3

so put a limit order in right now for 19.50 not above that. Why not try and get it for 19.00 with a limit order first. Once it moves above you are out of luck. But keep the order placed at 19 or 19.50 and if it dips down you might just get it. If you are using a broker he should help you. If you are using a discount trading house you get what you pay for. 7 dollar trades and no help.

Answer 4

If you set a limit order, it is treated differently than a market order. If you set a limit order, the broker is obligated to get you the best price available.

Additionally, a limit order, from the broker and the market maker's perspective is like an option. You have offered to keep the market liquid, and so exercise of the order by the market maker save the maker's liquidity and so in return for getting you the best price, they get a free stock option.

You will get the best price available at the time the order was received, subject to any competing and outstanding orders.

Answer 5

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