Limit Price
Maximum buy or minimum sell price
What is Limit Price?
Limit Price The specific price set on a limit order as the maximum you will pay (when buying) or minimum you will accept (when selling). In options trading, always use limit orders rather than market orders to avoid getting filled at unfavorable prices, especially in illiquid options.
Complete Definition
The specific price set on a limit order as the maximum you will pay (when buying) or minimum you will accept (when selling). In options trading, always use limit orders rather than market orders to avoid getting filled at unfavorable prices, especially in illiquid options.
Example
You want to buy a call option with a bid of $2.50 and ask of $2.70. You place a limit order at $2.60 (the mid-price).
Related Terms
Want to Learn More?
Explore our educational resources and analytics tools to deepen your understanding.