All terms
Limit order (Limit-Order)
An order executed only at or better than a maximum (buy) or minimum (sell) price you set.
With a limit order you set the price boundary yourself. When buying, the limit is the highest price you will pay; when selling, the lowest you will accept.
Example: a share trades at 51.20 euros. You set a buy limit of 50 euros. If the price falls to 50 euros or below, the order is executed. If it doesn't, nothing happens.
The benefit: you are protected from nasty surprises, for example during sharp swings or in thinly traded stocks. The downside: there is no guarantee your order will be executed at all.