With a limit order you name the worst price you will accept. A buy limit sits at or below your maximum; a sell limit sits at or above your minimum. The order may fill partly, fully, or not at all if the market never reaches your level. That control helps you avoid paying a sudden spike, but you may miss a trade you still wanted. Market orders prioritise speed of execution instead of price control.
Key takeaways
- You control the price boundary; the market controls whether you trade.
- Unfilled limit orders leave you with cash or shares you might have wanted to move.
- In thin markets, limits help protect you from poor prints.
- Check order validity (day, good till cancelled) so old orders do not surprise you.
Why it matters in Ethiopia
On a young exchange, liquidity can be uneven across names. Limit orders give new investors a practical way to set a fair price rather than chasing the last trade.