DEFINITION of At Limit
At limit is an order that sets a maximum limit on the buy price and/or a minimum limit on the sell price. An at limit order, rather than triggering a transaction at a specified price, like a standard limit order, stops triggering once the limit is reached.
BREAKING DOWN At Limit
At limit orders can be especially useful when one is placing bulk orders or if the market is moving very rapidly in one direction or the other. It's also helpful when one is seeking to accumulate or dissipate a position over time.
More generally, a limit order is a take-profit order placed with a bank or brokerage to buy or sell a set amount of a financial instrument at a specified price or better; because a limit order is not a market order, it may not be executed if the price set by the investor cannot be met during the period of time in which the order is left open. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled.
Market orders are instructions for a broker or brokerage service to buy or sell an investment immediately at the best available current price.
Because all orders must be submitted either 'At Market' or 'At Limit' formally, it is common for trading instructions to be shouted or selected online as at market or at limit.
The significance of indicating an order instruction at limit means a ceiling or floor is established at the max and minimum an investor is willing to pay for a security. This may be appropriate for strategies that are opportunities in nature and do not require immediate trade execution. Because sizable order flows can push the prices of securities higher or lower, an order marked at limit can avoid unnecessary security pricing effects brought on by supply and demand imbalances.
At limit doesn't necessarily indicate an investors opinion as to whether a security is over or underpriced, it simply allows them to avoid paying too much during a run higher and selling too low during a selloff.