Limit Order — What it is and when to use it

Definition

A limit order is an instruction to buy or sell a financial instrument at a specified price or better. Unlike a market order, a limit order guarantees the price but doesn't guarantee execution.

Limit order vs market order

How limit orders work — examples

Buy limit order

PKO BP shares cost 55 PLN. You think it's worth buying at 52 PLN.

You place: Buy 100 shares PKO BP, limit 52 PLN

• If price drops to 52 PLN or lower → Order executes
• If price doesn't drop → Order expires (after validity period)

Sell limit order

You own KGHM shares bought at 130 PLN. You want to sell at 150 PLN.

You place: Sell 50 shares KGHM, limit 150 PLN

• If price rises to 150 PLN or higher → Order executes
• If not → Order waits

Other order types on GPW

When to use limit orders

• Buying illiquid stocks — Market order could execute at inflated price
• You have a target entry price — Waiting for a correction
• Selling for profit — Setting profit realization price
• Large orders — Minimizing market impact

When NOT to use

• High-liquidity ETFs — Spread is minimal, market order suffices
• Urgent transaction — You need immediate execution
• Strong trending markets — Price may run away and order never executes

How Freenance can help

Freenance doesn't place orders — it's a tracking and planning tool. But knowledge of order types helps you invest more efficiently:

• Purchase price tracking — See average price and profit/loss on each position
• Transaction history — Complete picture of your investment decisions
• Portfolio value updated in real-time

👉 Track your investments with Freenance — freenance.io