No. of Recommendations: 1
I had the same thing explained to me as well. The limit order is just a note to the broker telling them to place a market order once the target price has been reached. The target price is only reached once there is a trade that meets the limit criterion. So it's entirely possible to have something trade over your limit as the first trade that would trigger your order. Working with limit and stop orders when there is very little liquidity can result in curious results. You could get an execution price a fair amount off from your entered price.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.