In the stock market, what is a limit order designed to specify?

In the stock market, a limit order is designed to specify a maximum buying price or minimum selling price.

A buy limit order can execute only at the stated price or lower. A sell limit order can execute only at the stated price or higher. This gives the investor price control, but it does not guarantee that a trade will occur. The market may never reach the specified level, or there may not be enough available shares.

This differs from a market order, which prioritizes execution at available prices. A limit order can remain open until it executes, expires, or is canceled, depending on the instructions selected through the broker.

Investors may use limit orders when controlling the transaction price matters more than immediate execution. The final result can still depend on liquidity, order priority, and market conditions.