Glossary · PSX Mechanics
Limit Order
An instruction to buy or sell a security at a specific price or better. The order is only executed if the market reaches the specified price, giving the investor control over the execution price.
01—What is Limit Order?
The definition — and what it means in practice.
A limit order is an instruction to buy or sell a security only at a specified price or better. For a buy limit, it executes at your limit price or lower; for a sell limit, it executes at your limit price or higher. If the market never reaches your chosen price, the order may remain unfilled. A limit order controls price, but not the timing or certainty of execution.
Limit orders matter because they help you avoid paying more (or selling for less) than you intended, especially when prices move quickly. They are also useful when a share has a wide bid–ask spread or limited liquidity, where a market order can fill at an unfavourable price. The trade-off is that you can miss the opportunity if the price touches your level briefly or never reaches it.
If you place a buy limit at Rs 100, your order will only fill at Rs 100 or less; if the share stays above Rs 100, it will not execute.
- Buy limit: executes at the limit price or lower; sell limit: at the limit price or higher.
- A limit order gives price control, but does not guarantee execution.
- Fill quality depends on available volume and where your order sits in the order queue.
- Limit orders can help manage slippage in fast or thinly traded markets.
02—How limit order works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the Pakistan Stock Exchange (PSX), a limit order is a common way to specify the maximum price you will pay or the minimum price you will accept. Your broker routes the order into the market’s order book, where it can match against opposite orders if the market reaches your limit. If it does not, the order can remain pending according to the order conditions you select with your broker.
PSX trading includes a pre-open session followed by continuous trading during market hours. Price movement can also be constrained by daily price limits (circuit breakers) for most equities, set around the previous close (LDCP). In practice, that means a limit order may not fill if your limit is outside the day’s allowed range, or if the price cannot move far enough within the session to reach it.
After a limit order executes, the trade follows the normal post-trade process in Pakistan: it clears through NCCPL, shares are held electronically at the Central Depository Company (CDC), and settlement is T+1 (one business day). These steps affect when cash and shares are finally delivered, but they do not change the execution rule of a limit order, which is always ‘at your price or better’.
03—Common misconceptions
Where investors most often get this wrong.
A limit order always gets filled if I place it.
A limit order only fills if the market reaches your price and there is enough opposite volume. Otherwise it can remain unexecuted.
A limit order guarantees the exact price I wrote.
It guarantees a worst-case price, not an exact price. You may get a better fill (lower for buys, higher for sells) depending on available orders.
Limit orders are only for day traders.
Any investor can use them to control entry or exit prices, particularly when liquidity is lower or the bid–ask spread is wider.
04—Using limit order on BSL
Where this term shows up across the platform — with live data.
- Review the difference between a limit order and a Market Order.
- Learn how prices form using the Order Book.
- Compare the displayed Bid Price and Ask Price.
- Understand related risk controls like a Stop-Loss Order.
05—Frequently asked questions
What investors ask about limit order on the PSX.
Frequently Asked Questions
A limit order on the PSX is an order to buy only at a specified price or lower, or to sell only at a specified price or higher. It executes only if the market reaches your limit and there is enough opposite interest to match your order.
No. In Pakistan, as on any exchange, a limit order executes only when the market trades at your price (or better) and there is sufficient volume available. If the price does not reach your level, the order can remain unfilled.
For a buy limit, “better” means a lower price than your limit. For a sell limit, “better” means a higher price than your limit. Your limit sets the worst price you will accept.
Most PSX equities have daily price limits (circuit breakers) around the previous close (LDCP). If your limit is outside the day’s allowed range, the market may not be able to trade at your price that day, so your order may not execute.
PSX settlement is T+1, meaning the trade settles one business day after execution. Clearing is handled through NCCPL and shares are held electronically at the CDC.
06—Related terms
Keep building the picture.
An instruction to buy or sell a security immediately at the best available current price. Guarantees execution but not the price at which the trade is filled.
A real-time electronic record of all buy and sell orders for a security on the exchange, showing prices and quantities at each level.
The highest price a buyer is willing to pay for a security. The gap between the bid and ask price is the spread and represents the cost of trading.
The lowest price a seller is willing to accept for a security. Also called the offer price. The difference between the ask and the bid price is called the spread.
An instruction to sell a security when it reaches a specified price, automatically limiting the investor's loss on a position.
A regulatory mechanism that temporarily halts trading in a security or the entire market when prices move beyond a defined threshold. On the PSX, individual stocks generally have upper and lower price limits of 10% or Re 1, whichever is higher, per session to prevent extreme volatility.
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