Answer:
A limit order is an order to buy or sell a stock at a specific price or better. There are several characteristics of a limit order:
A limit order is not executed immediately, but is instead placed on the order book to be executed when the stock's price reaches the specified limit price or better.
A limit order allows the trader to specify the maximum price they are willing to pay for a stock (if buying) or the minimum price they are willing to accept for a stock (if selling).
A limit order ensures that the trader will not pay more than the specified price (if buying) or receive less than the specified price (if selling).
A limit order may not be executed if the stock's price never reaches the specified limit price.
A limit order can be placed for a specified duration, such as a day, a week, or until it is cancelled by the trader.
A limit order may also be used to open or close a position in a margin account.