A limit order is a type of order used in trading that allows an investor to set a specific price at which they want to buy or sell a security. This means that the order will only be executed if the market price reaches the specified limit. For example, if an investor wants to buy a stock at $50, they can place a limit order at that price, ensuring they do not pay more than they are willing to. Limit orders provide more control over the price at which a trade is executed compared to market orders, which buy or sell immediately at the current market price. However, there is no guarantee that a limit order will be filled, especially if the market price does not reach the specified limit. This makes limit orders useful for investors who have a specific price target in mind for their trades.