Taking Your Trade To The Limit

What you don't know about limit orders could cost you

So you're ready to trade some XYZ stock. How are you going to place the order? You have two basic choices: a market order or a limit order. Buy or sell "at the market" and you'll get the price that's available when your order hits the bourse. But with volatile stocks in thin markets--such as many of today's tech issues--that can be a risky proposition. A limit order limits your risk by letting you name your own price for a stock. No less an authority than Securities & Exchange Commission Chairman Arthur Levitt thinks limit orders, which now make up two-thirds of orders on the New York Stock Exchange, are the small investor's best friend.

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