How to Set a Limit Order on Robinhood

 

Investing in shares and stocks requires you to have a previously set investment strategy that protects your portfolio in case things go wrong.

Fortunately, investors who choose Robinhood as their main platform have at hand many features that help them control the execution price of their orders.

For example, setting up limit orders is a great way to ensure the security of an operation while managing the related risk that an investor might face.

That’s why today’s guide has the purpose of showing you all the information you need about the following matters:

• How to Set a Limit Order on Robinhood;
• What are limit orders exactly?;
• Setting up buy or sell limit orders inside Robinhood’s platform.

Understanding Limit Order on Robinhood

A limit order is an order type where you specify the limit price you are willing to pay or sell a stock for.

It’s one of the order types that grants you full control of the market order, since it’s all previously set up before being executed.

Imagine that you want to buy or sell stocks, but you need to wait for the stock price to reach a certain value before you execute the operation.

Clearly, you can’t watch the screen all day long - in this case, just provide instructions to the platform, fill in limit order details, and you will be good to go.

Just have in mind that this type of market orders does not guarantee execution.

If the stop price is not reached, the operation won’t be guaranteed - besides, there’s a need to have a buyer and a seller on both sides of the transaction.

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Buy Limit Order & Sell Limit Order

There are two order types related to limit orders:

• Buy limit order: it takes place when a stock is purchased at your limit price or lower. For example, if you want to pay $15 for a stock, but the current market price is $18, you set the buy limit order to $15, and when the limit price or lower reaches the stock, the order will get filled;
• Sell limit order: it happens when a stock you own is sold at your limit price or higher. If the stock reaches your set price or better, the order will get filled automatically. For instance, if the current value of your stock is $15, but you want to sell it at a higher price ($18), the order will get triggered if you have previously set it.

Stop Limit Orders

On the other hand, stop-limit orders are the combination between stop-loss orders and limit orders.

A stop-loss order prevents you from losing money by protecting you against a certain level of market fluctuation.

If a stock price falls, the stop-loss order will be there before it reaches the lowest price possible.

You can learn more about stop-loss orders and stop-limit orders by going to the official Robinhood Website.

How to Set a Limit Order on Robinhood

Now that you know the theory behind these order types, it is time to learn how to set them up in Robinhood.

Remember that the market order types you use entirely depend on your investment strategy.

Risk will always be there, so if you are a wise investor, you will perform your own research before getting any market order executed!

1. Setting Limit Sell Order on Robinhood

In order to set a limit sell order type, you need to follow the three steps we are about to show you.

Step 1: Select the Share You Want to Sell

Tap on the Robinhood app, and on the main screen, look for the stock or share you want to sell.

Step 2: Tap on the “Trade” Button

Once you have opened the stock’s screen, look for the “Trade” button and tap it.

Step 3: Select “Sell” and Set the Details (Limit Price, Contract, and More)

Then, select “Sell.” Here, you need to fill in all the information required by the platform, such as number of contracts, limit price, and more.

Take into account that you must set a limit price or higher for which your stocks will trade or sell.

The order won’t execute if the maximum price you set isn’t reached by the stock.

Step 4: Tap on “Review” and Finish Placing the Order

Finally, tap on “Review,” place the order, and wait for it to execute in a while.

Remember that someone must accept your terms beforehand - if, for example, there’s no one to purchase the order, it won’t get filled.

2. Setting Buy Limit Order on Robinhood

Setting up buy limit orders is also elementary, and you can do so by following these steps.

Step 1: Look for the Stock You Want to Invest In

Sign in or log in to your Robinhood account, and then again, look for the stock you want to buy.

Step 2: Tap on “Trading” and then on “Buy”

Select the “Trading” button. After tapping on the “Trading” button, you need to select “Buy” instead of “Sell.”

Step 3: Select “Share” and then “Conditional Order”

Now, tap on “Share” at the top right corner of the screen, and scroll down until you find the “Conditional Order” section.

Step 4: Set Limit Market Price and Place the Buy Order

Here, you need to set the limit price and the overall conditions of the order.

Remember that, in this case, you are aiming at buying a stock and a lower price than it’s currently available.

You will also need to set up trading hours, so in case the price isn’t reached, you can reverse the order before a certain period of time passes.

That’s how you do it! For more Robinhood information, always rely on GrowFollowing.

FAQ

Why Can’t I Purchase Stocks on Robinhood?

Perhaps you don’t have enough buying power, or your account has been restricted.

Learn how to solve this problem here: Robinhood Restricted from Purchasing.

About the author

Steve

Steve specializes in cryptocurrency and finance. As a born researcher, he won’t leave any stone unturned when it comes to topics he covers.