Limit Order
An order to buy or sell only at a specified price or better. Guarantees price but not execution.
A limit order sets the worst price you are willing to accept. A buy limit will only execute at or below your limit price; a sell limit only at or above it.
If the market never reaches your limit price, the order sits in the order book unfilled. This means you control cost basis but accept the risk of missing the trade entirely.
Limit orders that rest in the book add liquidity and typically qualify for maker rebates on exchanges that charge maker-taker fees.
On the desk
XYZ is trading at $50.00. You place a buy limit at $49.50. The order sits until the price drops to $49.50 or below, then fills at $49.50 or better.