A limit order on E*TRADE is a powerful tool for investors who want more control over the price at which their trades execute. Unlike a market order, which aims to execute immediately at the best available price (which can fluctuate), a limit order ensures your trade only goes through at a specified price or better. This is especially useful in volatile markets or when trading less liquid securities.
Ready to take control of your trades? Let's dive into how to set up a limit order on E*TRADE, step by step!
Understanding Limit Orders: A Quick Primer
Before we get into the "how-to," let's quickly clarify what a limit order is and why it's so valuable:
What it is: A limit order is an instruction to your broker (E*TRADE, in this case) to buy or sell a security at a specific price or better.
Buy Limit Order: You set a maximum price you're willing to pay. The order will only execute if the stock's price drops to your limit price or lower.
Sell Limit Order: You set a minimum price you're willing to accept. The order will only execute if the stock's price rises to your limit price or higher.
Key Benefit: It gives you price control, preventing you from buying too high or selling too low.
Key Drawback: There's no guarantee of execution. If the market never reaches your specified limit price, your order won't fill.
Now, let's walk through the process on E*TRADE.
Your Step-by-Step Guide to Placing a Limit Order on E*TRADE
Whether you're using the ETRADE website or one of their trading platforms (like Power ETRADE), the core steps are similar. We'll focus on the general web interface, as it's the most common starting point.
Step 1: Log In to Your E*TRADE Account
Engage! First things first: are you ready to take the reins of your investing journey? If so, open your web browser and navigate to the official E*TRADE website (etrade.com).
Enter your User ID and Password in the designated fields.
Click "Log On" to access your account.
Step 2: Navigate to the Trading Interface
Once you're logged in, you'll need to find where to place a trade.
Locate the "Trade" or "Trading" Section: On the E*TRADE homepage or navigation bar, look for a tab or menu option labeled "Trade" or "Trading." It's usually prominently displayed.
Select "Stocks & ETFs" (or the relevant asset class): Since you're likely trading stocks, click on the option that allows you to buy or sell stocks or ETFs. E*TRADE offers trading for various asset classes, so ensure you select the correct one.
Step 3: Enter the Security Information
This is where you specify what you want to trade.
Search for the Symbol: You'll see a search bar or a field for "Symbol" or "Company Name." Type in the stock ticker symbol (e.g., AAPL for Apple, MSFT for Microsoft) or the company name. As you type, E*TRADE will often provide suggestions.
Confirm the Security: Double-check that the correct security is selected. Mis-typing a symbol can lead to unintended trades!
Step 4: Specify Your Order Details
This is the heart of placing a limit order.
Sub-Step 4.1: Choose Your Action (Buy or Sell)
"Buy" or "Sell": Clearly indicate whether you intend to buy the shares (to open a new position or add to an existing one) or sell them (to close a position or reduce your holdings).
Sub-Step 4.2: Enter the Quantity
"Quantity" or "Shares": Enter the number of shares you wish to buy or sell. Be mindful of minimums or maximums that might apply.
Sub-Step 4.3: Select "Limit" as the Order Type
Crucial Step! This is where you differentiate your order from a market order. Look for a dropdown menu or radio buttons labeled "Order Type" or "Type."
From the available options, select "Limit." This tells E*TRADE you want to set a specific price.
Sub-Step 4.4: Set Your Limit Price
"Limit Price": A new field will appear where you can enter your desired limit price.
For a Buy Limit Order: Enter the maximum price per share you are willing to pay. For example, if a stock is trading at $100 and you only want to buy if it drops to $98 or lower, you would enter "$98" as your limit price.
For a Sell Limit Order: Enter the minimum price per share you are willing to accept. For example, if you own a stock currently at $50 and want to sell it only if it reaches $52 or higher, you would enter "$52" as your limit price.
Be Realistic: While you have control, setting an unrealistic limit price (too far from the current market price) means your order may never execute.
Sub-Step 4.5: Choose Your "Time in Force"
The "Time in Force" (TIF) determines how long your order remains active in the market. This is an important consideration!
Common TIF Options on E*TRADE:
Day: This is the default and most common. Your order will remain active only until the end of the current trading day. If it's not filled by market close, it will automatically cancel.
Good 'Til Canceled (GTC): Your order will remain active for an extended period (typically up to 60 or 90 calendar days on E*TRADE, but check their specific policy) or until it is fully executed or you manually cancel it. This is often preferred for limit orders where you're willing to wait for your price.
Immediate or Cancel (IOC): Attempts to execute all or part of the order immediately. Any unfilled portion is then canceled.
Fill or Kill (FOK): Requires the entire order to be filled immediately, or it's canceled. No partial fills.
Select the TIF that aligns with your trading strategy and patience level. For most long-term investors using limit orders, GTC is a popular choice.
Step 5: Review and Confirm Your Order
Careful Review: Before you commit, E*TRADE will display an order confirmation screen. This is your last chance to review all the details of your limit order.
Action: Buy/Sell
Symbol: The correct stock
Quantity: The number of shares
Order Type: Limit
Limit Price: Your specified price
Time in Force: How long the order is active
Estimated Cost/Proceeds: A calculation of the potential cost (for buy) or proceeds (for sell), though final execution might vary slightly if partial fills occur at better prices.
Commissions/Fees: Check for any applicable fees. E*TRADE often offers commission-free trading for many stocks and ETFs, but it's always good to confirm.
Place Order: If everything looks correct and you're confident in your trade, click the "Place Order" or "Confirm" button.
Step 6: Monitor Your Order
Once placed, your limit order won't execute until the market price meets your specified limit.
Check Order Status: E*TRADE provides an "Orders" or "Order Status" section within your account. Here, you can see if your order is:
Pending: Waiting to be filled.
Partially Filled: Some shares have been traded, but not all.
Filled: The entire order has been executed.
Canceled: The order was canceled (either by you or because its "Time in Force" expired).
Modify or Cancel: If market conditions change or you change your mind, you can modify your limit order (e.g., adjust the price or quantity) or cancel it entirely before it executes. This is done through the "Order Status" or "Pending Orders" section.
When to Use a Limit Order
Limit orders are particularly advantageous in these situations:
Volatile Markets: When prices are fluctuating rapidly, a limit order helps you avoid unexpected fills at unfavorable prices.
Thinly Traded Stocks: For stocks with low trading volume, market orders can lead to significant slippage (execution at a price worse than expected). A limit order helps protect against this.
Entry/Exit Strategy: If you have a specific price target for entering or exiting a position, a limit order allows you to set it and forget it (especially with GTC), rather than constantly monitoring the market.
After-Hours or Pre-Market Trading: Market orders are generally not supported during extended hours. Limit orders are essential for trading outside of regular market hours.
10 Related FAQ Questions about E*TRADE Limit Orders
How to distinguish a limit order from a market order on E*TRADE?
A limit order on E*TRADE requires you to specify a precise price (your "limit price") at which you want your trade to execute or better, offering price control but no guarantee of execution. A market order, conversely, aims for immediate execution at the best available current market price, guaranteeing execution but not the exact price. When placing an order, you'll explicitly select "Limit" or "Market" from the "Order Type" dropdown.
How to set a "Good 'Til Canceled" (GTC) limit order on E*TRADE?
When placing your limit order, after you've entered the symbol, quantity, and limit price, look for the "Time in Force" or "Duration" option. From the dropdown, select "GTC" (Good 'Til Canceled). This will keep your order active for an extended period (typically up to 60-90 days, as per E*TRADE's policy) until it's filled or you manually cancel it.
How to modify an existing limit order on E*TRADE?
To modify a pending limit order, log into your E*TRADE account and navigate to your "Order Status" or "Pending Orders" section. Find the specific order you wish to modify, and there should be an option (often represented by an "Edit" icon or button) to adjust parameters like the limit price or quantity. Remember to review and confirm the changes.
How to cancel a pending limit order on E*TRADE?
Similar to modifying, go to your "Order Status" or "Pending Orders" section in your E*TRADE account. Locate the limit order you want to cancel and click on the "Cancel" button or link associated with that order. Confirm your cancellation when prompted.
How to know if my E*TRADE limit order was filled?
E*TRADE will typically send you a confirmation (email, notification) once your limit order is filled. You can also actively check your "Order Status" section, where filled orders will show a "Filled" status. Additionally, the purchased or sold shares will appear in your "Portfolio" or "Holdings."
How to handle partial fills on an E*TRADE limit order?
A partial fill means only a portion of your requested shares were traded at your limit price or better. E*TRADE will update your order status to "Partially Filled" and show the quantity executed. The remaining quantity of your order will remain active until it's fully filled, canceled, or its "Time in Force" expires.
How to place a buy limit order below the current market price on E*TRADE?
To place a buy limit order below the current market price, you'll select "Buy" as your action, choose "Limit" as the order type, and then enter a "Limit Price" that is lower than the current trading price of the stock. Your order will then wait for the stock's price to drop to or below your specified limit to execute.
How to place a sell limit order above the current market price on E*TRADE?
To place a sell limit order above the current market price, you'll select "Sell" as your action, choose "Limit" as the order type, and then enter a "Limit Price" that is higher than the current trading price of the stock. Your order will then wait for the stock's price to rise to or above your specified limit to execute.
How to determine a good limit price for my E*TRADE order?
A "good" limit price depends on your investment strategy and market analysis. Consider:
Current Market Price: Don't set it too far from the current price if you want it to execute reasonably soon.
Support/Resistance Levels: Technical analysis can help identify price points where a stock might find support (for buy limits) or resistance (for sell limits).
Your Risk/Reward: What is the maximum you're willing to pay or the minimum you're willing to accept to meet your investment goals?
Volatility: In highly volatile markets, larger spreads between your limit and current price might be necessary if you're aiming for a significant move.
How to use limit orders for after-hours or pre-market trading on E*TRADE?
E*TRADE generally requires limit orders for trading during extended hours (pre-market and after-hours). When placing your order, select "Limit" as the order type and choose a "Time in Force" that includes extended hours, such as "Day + Extended" or "GTC + Extended" (if available). Be aware that liquidity is typically lower during extended hours, which can affect execution.
