instruction to execute an order for a stock only at a specified price or better. The broker continues the order until a specified date or until the customer terminates it. Assume an investor places a limit order to buy at $10 or less a stock now selling at $11. If the stock goes up to $20, the broker will not execute a buy order; if it falls  to $10, the broker will execute a buy order immediately. Note that the broker does not buy a stock for the broker's own account. The broker brings a buyer and seller together and executes a transaction for a commission. Only a dealer (or a broker-dealer acting in its capacity as a dealer) ever actually buys or sellsi.e., takes an inventory position.