Question: Does limit order place whenever stock is below price set?
So if i were to place a limit order to buy for the next day, does the limit order execute only if its "under" the price i set it to? So say the stock closed at $2.50. I set the limit order to buy @ 2.75. When the market opens next day, it's selling at 2.55. The order will be placed at that price right? (since its under 2.75) or does it execute only when it hits exactly 2.75?
Answer:
Since it is a Limit order, that indicates that you are not willing to pay more than the limit. But, any price offered that is at or below the limit makes it an immediate market order.
One caveat is that if the price is moving fast, the market order may fire at a price somewhat different than the limit.
At exactly $2.75.buy or sell it's $2.75
You may not get the opening price. The broker will attempt to buy the stock for you just like a market order except that he will not pay more than 2.75.