Glossary · Trading & markets
What is Limit order?
An order to buy or sell at a specific price (or better). Sits in the order book until it fills or you cancel. Charges maker fees and avoids slippage but doesn't guarantee execution.
Last updated April 30, 2026
How it works
A limit buy order says "buy X amount at $Y or lower." The exchange posts it on the bid side of the book at price $Y. It waits there until someone places a sell that crosses $Y. If price never reaches $Y, the order never fills.
Limit orders are usually classified as maker orders, charging the lower fee tier. They don't experience slippage in the traditional sense — you either fill at your stated price or don't fill at all.
Example
ETH is at $3,420 right now. You think it'll dip and you want to buy 1 ETH at $3,400.
- Limit buy at $3,400: Posts to the book. Three hours later ETH dips to $3,398, your order fills at $3,400. You paid the maker fee (say 0.4%) on $3,400 = $13.60.
- Same setup, but ETH never dips: Order sits unfilled. The next morning ETH is at $3,500. You either move the limit up or cancel and place a market buy at the worse price.
The limit order saved you 0.6% on the fee (vs taker) AND $20 on the entry (vs market-buying when ETH was at $3,420), but only because it actually filled. The 30-50% of the time limit orders don't fill, the trade-off is whether you regret missing the entry.
Why it matters
Limit orders are the right default for most traders most of the time:
- DCA buys. Set a series of limit buys below current market — cheaper average entry, lower fees.
- Profit-taking. Stack sell orders at staircased target prices. You'll partially-fill if price rallies; if it collapses you keep the position.
- Stop-limit (a variant) triggers when price crosses a stop level, then places a limit. Useful for damage control but watch for "gap" markets where price can blow past both your stop and your limit.
Limit orders fail you in two situations:
- Fast-moving news. Price gaps past your limit and never comes back. Common in earnings/headlines/exchange listing announcements.
- Tight ranges. Asset chops in a 0.5% range for hours and your $100-below-market limit never gets hit. Lifting the limit later usually means worse fees and worse fill.
Most CEX and DEX UIs default to market orders for simplicity. Switching to limit (and learning to set sensible target prices) is one of the highest-leverage habits an active trader picks up.