investing
Limit on close orders
August 01, 2018

A limit on close order can only be placed on day orders and is based on the market closing price on the current trading day when the order is entered while the market is open. If the order is entered while the market is closed, the limit price is based on the market closing price on the following trading day.

When you place a buy order with a limit on close order (LOC), you’re setting the maximum price you’re willing to pay. If the market price at close on the current trading day is at or below the maximum price (limit) you set, your order is processed. If the market price is above the limit you set, your order is cancelled.

When you place a sell order with a limit on close order (LOC), you’re setting the minimum price you’re willing to accept when you sell. If the market price at close on the current trading day is at or above the minimum price (limit) you set, your order is processed. If the market order is below the limit you set, your order is cancelled.

Let's use an example:

You place a buy LOC order (bid) for 200 shares of ABC Company at a limit price of $125.00 per share. Your order will be processed (executed) if the shares are trading at or below $125.00 per share at market close on the current trading day. If the price at market close is $128.00 per share, your order would be cancelled.

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