A limit order is when an order is placed to buy or sell a security at a specific price or better. When buying, the trade will be executed only at the limit price or lower. A customer entering a buy limit order is stating that he is willing to pay no more than the limit price.
Buy Limit (below the market)
Buy orders are placed below the market. If ABC stock is trading at $60 a share, an investor would place a limit order below the current price to see if it can be bought cheaper during the day or perhaps over the course of several days. If the customer is just looking to buy the stock right away, he should not use a limit order, he should just but it at the market (a market order).
Sell Limit (above the market)
Investors will sell stock using limits above the current market. If a customer owned a stock at $65 and wanted to sell it using limit directives - he would place a sell limit at $66 or other where the stock could rise up to.
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