- 1.1 3 types of limit orders
- 1.1.1 Buy limit order
- 1.1.2 Sell limit order
- 1.1.3 Stop-loss order
- 2.1 4 steps to set sell limit order on Robinhood
- 2.1.1 Step 1: Select your share to sell
- 2.1.2 Step 2: Find the “Trade” button and tap on it
- 2.1.3 Step 3: Select “Sell” and set all the details
- 2.1.4 Step 4: Click “Review” and complete the process
- 2.2 4 steps to set buy limit order on Robinhood
So if you use Robinhood – one of the most popular platforms for traders – you might have faced the difficulty of setting a limit order. The default setting on Robinhood when placing an order is a market order. So putting a limit order on Robinhood necessitates a few extra steps.
But don’t worry. This article will let you know how to set limit order on Robinhood. Follow our 4-step approaches to put a limit order in Robinhood.
What is a Limit Order?
Limit orders to buy or sell stock are one of the safest order types to utilize. That is because they provide you with complete control over the price you’re prepared to pay or receive for the shares you’re buying or selling.
A limit order specifies the limit price, which is the highest price you’re ready to pay for a stock or the best deal you’re willing to accept when selling assets. This instructs your broker to only execute the trade if they can obtain the price you want or a better price.
3 types of limit orders
There are three order types related to limit orders. They are as follows:
Buy limit order
Buy limit order in Robinhood occurs when you purchase a stock at or below your limit price. For example, you might wish to buy a stock for $15 but the current valuation is $18.
As a result, you can place a buy limit order for $15 and the order will be honored whenever the stock reaches the limit price.
Sell limit order
Sell limit occurs when you sell your stock at or over its limit price. The order will be filled automatically if the stock price meets or exceeds your selected price.
For instance, suppose the market rate of your stock is $15, but you wish to sell it for $18. You can set a sell limit on Robinhood for the order to be triggered at that price.
Traders and investors use stop-loss orders on Robinhood to limit risks and reduce potential losses. Also, an investor uses a stop-loss order to exit a trade if the price of his or her investment goes to a predetermined level that indicates a certain amount of trade loss.
In the scenario that the market goes against him, a trader might minimize his risk in the deal by setting a stop loss on Robinhood.
A trader who buys a stock at $15 per share, for example, might place a stop-loss order to sell his shares at $10 per share, closing out the trade. His investment risk is essentially based on the maximum depreciation of $5 per share.
The order will be executed automatically if the stock price goes below $20 per share, terminating the trade. Stop-loss orders can sometimes be incredibly beneficial when a trader’s position is hit by a large and unexpected price fluctuation.
How to Set Limit Order on Robinhood?
That you understand the idea it’s time to learn how to set a limit order on Robinhood. Keep in mind that the types of market orders you utilize are entirely dependent on your investment plan. Because risk will always exist, if you’re a sensible investor, you’ll conduct a study before placing any market order!
4 steps to set sell limit order on Robinhood
Our first target is to set Robinhood to sell at a certain price. For this, you will need to set limit sales on Robinhood.
Here are 4 simple steps to complete the process.
Step 1: Select your share to sell
You can begin the process by going to the Robinhood app. Inside the app, you will need to find the particular stock or share you want to set a limit sell on Robinhood. The stock should appear on the main screen of the app.
Step 2: Find the “Trade” button and tap on it
By now, you should find the exact stock you want to sell. Click on the stock and find the “Trade” button. Then, click on it.
Step 3: Select “Sell” and set all the details
After clicking on “Trade”, you should find the “Sell” option. Now, click on the “Sell” option and fill out the information. You will need to provide the contract number, limit price, and other data there.
Keep in mind that your stocks must trade or sell at the Robinhood set sell limit price or greater. If the stock fails to achieve the Robinhood sell limit price you set, the order will be canceled.
Step 4: Click “Review” and complete the process
Finally, hit “Review,” enter your order, and wait for it to be processed.
Keep in mind that another trader must agree to your terms in advance. If no one buys the order, for example, it will not be completed.
4 steps to set buy limit order on Robinhood
Once you have set a limit sell on Robinhood, you are done with half of the work. In the next phase, you will need to know how to set a buy limit order on Robinhood.
So, here are 4 further steps for the process.
Step 1: Find your stock to trade
The first step is exactly similar to the previous first step. You will need to log into your Robinhood account and find the stock you want to trade. It should again appear on the home screen.
Step 2: Find “Trade” and then select “Buy”
After clicking on your stock, find the “Trade” option inside. This time, you will need to select the “Buy” option instead of the “Sell” option like before.
Step 3: Select “Share” and then “Conditional Order”
After selecting “Buy,” go to the top right corner of the page and press “Share.” You will go to a new page. Now, scroll down to find the “Conditional Order” area.
Step 4: Set Limit Market Price and Place the Buy Order
You will need to set the order’s limit price and general criteria must be in the final phase. Keep in mind that you’re looking to acquire a stock at a cheaper price than it is now.
You’ll also want to specify trading hours so that if the price isn’t met, you can cancel a limit order on Robinhood before it expires.
As a trader, you would want to capture the short-term trend benefits in the charts. As a result, you will be more cautious of the market price. In this scenario, setting a limit order on Robinhood could just be the best decision for your stocks and shares.
Investors who use Robinhood for trading have a lot of features in their hands with the app. You can control the price you want to execute in the market. Thus, knowing how to set a limit order on Robinhood can be a great approach to ensuring security with risk management.
Why Can't I Place a Limit Order on Robinhood?
Both ends of the transaction must have a buyer and a seller for you to place a limit order on Robinhood. When there are not enough stocks in the market at the limit price you have set, it may take several trades to fulfill the order. Additionally, your order may never be filled at all.
How Do You Set a Stop Limit on Robinhood?
To make a stop-limit order, go to the options order screen first. You will find a gear icon there. Tap on it and then set your 'Stop Price.'
What is a Limit Order in Robinhood?
Limit orders are a technique in your trading arsenal that allows you to have more control over the price at which you buy or sell a stock. Limit orders 'limit' the amount you pay for a stock when you buy it and the amount you receive when you sell it. You can set the price at which you plan to buy or sell a stock with them.
How Fast Can You Buy and Sell on Robinhood?
You can make quick deposits of up to $1,000 with a Robinhood Instant account. And you have a tier amount option for instant deposits with a Robinhood Gold account. Within three business days of ETF, options, or stock sales, money from the Robinhood application is accessible for purchase.
What Happens If I Buy After Hours on Robinhood?
Your order will cancel at the end of after-hour sessions if the market price of the stock is above your limit price for a buy or below your limit price for a sell.