How to Buy a Stock Once It Reaches a Certain Price

Volatile stock markets provide several opportunities to buy stocks at reasonable prices.

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Stock prices are volatile. Even within the course of a single trading day, a stock may go up or down a few percentage points. To get the best return, you'll want to buy a stock at the best price. The way the stock market trades up and down, you can often get a certain price if you are willing to wait for it. But you'll have to enter a specific type of order to get your price.


If you are hoping to buy a stock at a specific price point, you can use a limit order in order to ensure that you achieve the best possible acquisition based on your preferences.

Understanding Limit Orders

A limit order requires you to specify the price you are willing to pay for a stock. If the stock never trades down to that price, your trade will never execute. This is the risk you'll have to accept if you're trying to wait for a particular price.

To enter a limit order, tell your broker what price you are willing to pay, or enter it online via your firm's trading website. For example, if a stock is trading at $50 per share but you're only willing to pay $45, you'll enter $45 as your limit price. That order will stay on the books until the stock trades down to that price or the order expires, whichever comes first. Limit orders expire at the close of business on the day you enter them. You can extend this expiration date by making your order "good-til-canceled." A GTC order expires at the discretion of the firm accepting the order. Typically, these orders last 60 days or longer.

If you wanted to sell a stock at a specific price, you could also use a limit order. For sales, you'd enter a price above the current stock price, and your sale wouldn't trigger until the stock reached your price. For example, you might put in a sell limit order at $50 if a stock is trading at $45, hoping it trades up to your target price and executes.

Exploring Market Orders

If you're happy to buy a stock at the current price, you can enter a market order. Unlike a limit order, a market order executes immediately. A market order eliminates the risk that a stock never trades down to your limit price. In a rapidly rising market, a market order might be the only way to buy a stock.

Evaluating Stop Orders

Stop orders are hybrid orders that combine aspects of both limit and market orders. To enter a stop order, you'll have to specify a price for a stock. Once that price is reached, the order becomes a market order, executing at the next available price. While similar to limit orders, stop orders do not guarantee a certain price; they only specify the price at which the order becomes a market order.

Defining Stop-Limit Orders

If you still want to specify a price, you can enter a stop-limit order, which becomes a limit order once the stop price is reached. For example, you could enter a stop-limit order with a stop price of $40 and a limit price of $38. Once the stock trades down to $40, the order becomes a limit order that will not execute unless the stock hits $38.