In plain language — A limit order sets the worst acceptable price. It protects the price if execution occurs, but it guarantees neither timing nor filled quantity.
A limit order buys at the stated price or lower and sells at the stated price or higher. A buy limit at 100 therefore rejects offers above 100, yet it can remain in the queue even when the chart touches that level. The SEC sources describe US stocks; verify availability and operating details for the specific broker and market.
Price and probability are separate problems. The level must be reachable, but enough opposing interest must also trade ahead of the order's queue position. A touch on a chart does not prove that the queue was fully served.
Passive, marketable and maker/taker role
A limit can reach the market under two different conditions:
- passive: it does not cross the opposite side and may rest in the book;
- marketable: the limit is aggressive enough to cross one or more existing offers and may execute immediately.
For example, with a 99.98 bid and a 100.00 ask, a buy limit at 99.90 is passive; a buy limit at 100.03 may purchase available asks up to 100.03. Both are limit orders, but the latter initially behaves as an aggressive order. 100.03 is a ceiling, not a required fill price: if the ask at 100.00 is still available, it can fill at 100.00. A marketable limit does not guarantee that the whole quantity will execute.
Consequently, limit does not automatically mean maker. An order that rests and is later attacked normally provides liquidity; a marketable limit normally removes it. Actual classification depends on the execution, not solely on the order name. The SEC also notes that auctions, internalisation and crossing systems can produce transactions that do not fit the simple maker/taker pair.
| Feature | Passive limit | Marketable limit |
|---|---|---|
| Crosses the book on arrival | No | Yes, within the limit |
| May remain queued | Yes | The remainder may do so, depending on instructions |
| Typical role | Maker if filled after resting | Taker for the immediate portion |
| Fill guaranteed | No | No, although initial likelihood is higher |
| Price protection | Limit or better | Limit or better |
Why the fill may not happen
Quantity at a price is distributed among orders under the venue's priority rules. In a price-time market, an earlier order at the same price precedes a later one. Other markets use pro-rata or hybrid allocation. In every case, the fact that a trade printed at the limit does not prove that the entire queue was consumed.
An order may therefore:
- receive no fill because price never reaches the limit;
- remain behind other quantity at the same price;
- receive a partial fill and leave an open remainder;
- be cancelled when its time instruction expires;
- be rejected or suspended by controls, halts or venue rules.
Illustrative example: assume an unchanged FIFO queue, with no cancellations or other instructions altering priority. Suppose 800 units are already queued at 50.00 and a buy limit for 300 is then entered. If sales for 900 units arrive and priority is price-time, the first 800 satisfy the earlier queue and only 100 may reach the new order. The result is a fill of 100 and a remainder of 200, even though 900 units traded at exactly 50.00.
Advanced: duration and residual quantity
Time in force establishes how long the order remains valid. Day, good-til-cancelled, immediate-or-cancel and fill-or-kill are common instructions, but availability, covered sessions and details can differ between brokers and venues. An IOC normally accepts an immediate partial fill and cancels the remainder; an FOK instead requires the full quantity immediately or no execution. The actual specification must be read, particularly for derivatives and crypto markets.
In the European Union, Article 28 of MiFID II requires firms to handle client orders promptly, fairly and expeditiously and, for otherwise comparable orders, according to time of receipt. For certain immediately unexecuted limit orders in shares, it also requires steps to make them public, unless the client instructs otherwise or an exemption applies. This is a rule governing the firm's order handling: it does not establish that every matching engine uses price-time and does not guarantee a fill.
Use and checks
A limit is suitable when the maximum or minimum price is an essential part of the plan: entry on a pullback, an exit with a take profit, gradual execution or protection from anomalous prices. The cost of that control is the risk of not participating in the move.
Before submission, check the limit, quantity, duration, session, possibility of partial fills and treatment of the remainder. If a higher probability of execution is needed, a market order gives up the price limit; a marketable limit offers a compromise but may still remain incomplete.
Common mistake — Treating a simple touch of the limit as proof that the order should have been filled in full.
Bronze Path — Execution module. Next: Stop order. Index: Bronze Path.
Sources
Sources checked on 8 September 2026. The Investor.gov bulletins cited here were updated on 18 August 2026.
- U.S. SEC, Investor.gov — Types of Orders — definitions in the US stock context.
- U.S. SEC — Limit Orders — limit or better; no fill guarantee.
- U.S. SEC, Investor.gov — Understanding Order Types — Investor Bulletin — Market Order, Limit Order and Timing Restrictions: fill prices, IOC and FOK.
- U.S. SEC — Rule 606 Regulation NMS, FAQ — FAQ 4.01: liquidity provision/removal and cases outside the maker/taker pair.
- CME Group — Matching Algorithm Overview — FIFO, pro-rata and variants.
- ESMA — MiFID II, Article 28: Client order handling rules — paragraphs 1–2: client-order handling and publication of certain stock limits.