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Simple English definitions for legal terms
no-limit order
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A quick definition of no-limit order:
A no-limit order is a type of command or instruction given to a broker to buy or sell securities without any limits on the price. This means that the broker can buy or sell the securities at any price, regardless of the market price. It is different from a limit order, which specifies a certain price for the transaction. A no-limit order can be risky, but it can also lead to higher profits if the market price goes up or down significantly.A more thorough explanation:
Definition: A type of order in which a buyer or seller does not set a limit on the price they are willing to pay or receive for a security.
Example: An investor wants to buy 100 shares of XYZ company, but they do not want to set a limit on the price they are willing to pay. They place a no-limit order, which means they are willing to pay any price to acquire the shares.
This example illustrates how a no-limit order allows the buyer or seller to be flexible with the price they are willing to pay or receive for a security. It can be risky because the price could end up being much higher or lower than expected, but it can also lead to a better deal if the market price is favorable.