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Limit Price

Maximum buy or minimum sell price

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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).

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