Limit Order
Trade only at your specified price or better.
What is Limit Order?
An order with a price ceiling (buy) or floor (sell). It will not fill at a worse price, which protects against bad fills but means the order may never execute at all.
Limit Order: a worked example
Buy limit at $49.50 on a stock trading at $50 - you wait, and may never get filled if the stock runs.
More terms in Positions & Trade Mechanics
Long Position
You own the asset and profit when its price rises.
Short Position (Short Selling)
You borrow shares, sell them, and profit if the price falls.
Margin
Borrowing from your broker to buy securities, using the account as collateral.
Cash Account
An account where every purchase is paid for in full, no borrowing.
Leverage
Using borrowed money to increase exposure relative to your own capital.
Initial Margin (Reg T)
The equity you must put up to open a margin position - generally 50%.
Maintenance Margin
The minimum equity percentage you must keep in a margin account.
Margin Call
A demand to add cash or securities after equity falls below maintenance.