Floor Limit

  

Categories: Trading, Stocks, Bonds

See: Limit Order.

The floor if a sell limit order is the cheapest price at which a seller of a security is willing to sell.

That is, if you own 500 shares of whatever.com currently trading at $32.33 a share and you then put a floor limit on that order. Think: $32.75 as the floor; below that number, the shares won't sell...they'll just sit there waiting and waiting like Godot until the market lets them hit $32.75.

Floors also exist on the other end, i.e. the highest price you'd pay for a share of BabysFirstChainsaw is $44.50. The stock is trading for $48 now, so your floor purchase price has gone a bit south.

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