Limit Price

The limit price is the maximum price a buyer is willing to pay or the minimum price a seller is willing to accept for a trade. It defines the boundary of the trade's execution.

When a limit order is placed, the exchange will only match it if the market price meets or beats the specified limit. This provides essential price protection for traders who want to avoid the uncertainty of market orders.

However, if the market price moves away from the limit price, the order remains unexecuted. For traders, correctly setting the limit price is a balance between getting the best possible deal and ensuring the order is actually filled in a timely manner.