See: Limit Order.
A limit down represents a type of limit order.
You own a stock currently sitting at $25. You decide to take the day off from trading to go see a performance of Wagner's complete Der Ring des Nibelungen.
You're worried about a big sell off while you're away, so you put a limit down order in place. If the stock drops by $5 a share, your broker will automatically sell.
These "limit down" situations can be more general as well. Some exchanges have limit down barriers that kick in if a stock or commodity (or whatever) drops too far too fast. If an asset hits this limit down level, trading curbs come into play.
See: Limit Move.
Related or Semi-related Video
Finance: What is an All or None Order?71 Views
finance a la shmoop what is an all-or-none order oh you'd think that
spoiled brats only live on playgrounds of participation trophy cities hmm but [Boys holding participation trophies]
that is oh so sadly not true they roam the wild hallways of Wall Street
investment firms in droves and all-or-none order means that a buyer or
seller of stock either wants all of their shares bought or sold or none of
them and yes this applies to bonds preferred stocks and other random [Man discussing stocks and bonds]
hybrids as well.....A buyer has a portfolio of 500 million dollars in small cap
growth stocks generally speaking she's told her clients that she won't take
less than a 2% position in anything because she wants to be able to focus on
a core group of stocks and really be on top of any big movements hoping to sell [Stocks in a sack land on a table]
the shares before well, any huge problems holding so in this case she's
found a company she loves an appropriately named coal company for [Woman looking through binoculars in her car]
spoiled investors called mine mine mine the only problem is that the stock is
thinly traded that is not a ton of shares trade every day and she needs to
own either ten million dollars worth of stock which would be a two percent
position or she doesn't want to own any the stock at the moment is trading at
ten dollars and seven cents a share and she wants it at ten bucks or better...
well at ten dollars and one penny she has no interest whatsoever in that stock [Stock graph for mine mine mine company]
at 10.00 she's a buyer so that is her limit order but on this all-or-none
order she waits and waits and waits knowing that sometimes all-or-none [Woman looking at laptop waiting for the stocks]
orders simply never get filled other times they get filled scarily too fast
like the seller knew something the buyer did not but along comes a bad market day
the White House says something stupid what are the odds? and the market tanks for
an hour and blam she is the proud new owner of a million shares of mine mine
mine good for her those shares are now all hers hers hers [Pigeon poops on mans head]
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