Ready to take more control over your stock trades? Understanding and using limit orders on Charles Schwab can be a game-changer for your investment strategy. Instead of simply buying or selling at whatever the market dictates at that moment, a limit order lets you specify the exact price you're willing to pay or receive. This can be incredibly powerful for securing better entry or exit points, especially in volatile markets.
Let's dive in and learn how to set a limit order on Charles Schwab, step-by-step!
The Power of the Limit Order: Why It Matters
Before we get into the "how," let's quickly recap why limit orders are so valuable.
Imagine a stock, XYZ, is currently trading at $100 per share.
- If you place a market order to buy, you'll likely buy XYZ shares close to $100, but the exact price isn't guaranteed. In a fast-moving market, you might end up paying $100.10 or even $100.50 if the price jumps quickly.
- If you place a limit order to buy XYZ at $99, your order will only execute if the stock's price drops to $99 or lower. You'll either get your desired price or better, or your order simply won't fill.
The same logic applies to selling. A limit order to sell at $101 means you'll only sell if the stock hits $101 or higher. This helps you lock in profits or prevent selling too low.
Now, let's get to the practical guide!
Step 1: Log In and Navigate to the Trading Platform
- First things first, let's get you logged into your Charles Schwab account. Whether you're using the Schwab website on your computer or the Schwab Mobile app on your phone, the initial step is always to securely access your account.
On the Charles Schwab Website:
- Open your web browser and go to
www.schwab.com. - Locate the "Log In" button, usually in the top right corner of the page.
- Enter your Login ID and Password.
- Once logged in, you'll typically land on your Account Summary page. Look for a "Trade" or "Trading" tab in the main navigation menu. Click on this to proceed. Often, you'll find an "All-In-One Trade Ticket" option, which is a great place to start for most order types.
On the Charles Schwab Mobile App:
- Open the Charles Schwab Mobile app on your smartphone or tablet.
- Enter your Login ID and Password (or use biometric login like fingerprint/Face ID if enabled).
- After logging in, you'll usually see an overview of your accounts. Look for a "Trade" icon or tab, often at the bottom of the screen. Tap on it.
Step 2: Select Your Asset and Action (Buy/Sell)
- Now that you're on the trading platform, it's time to tell Schwab what you want to trade and what you want to do with it.
Finding Your Security:
- Enter the Symbol: In the designated field (often labeled "Symbol" or "Ticker"), type in the stock ticker symbol (e.g., GOOGL for Alphabet, AAPL for Apple, MSFT for Microsoft). As you type, Schwab may suggest symbols.
- Verify the Security: Double-check that the correct company name appears next to the symbol to ensure you're trading the right asset.
Choosing Your Action:
- Select "Buy" or "Sell": There will be a clear option to choose whether you intend to Buy (to open a new position or add to an existing one) or Sell (to close an existing position). Click or tap on the appropriate action.
- Specify Quantity: Enter the number of shares you wish to buy or sell in the "Quantity" field. Be precise!
Step 3: Choose "Limit" as Your Order Type
- This is the crucial step where you differentiate your order from a simple market order.
- Locate "Order Type": On the trade ticket, you'll see a dropdown menu or a selection of radio buttons for "Order Type."
- Select "Limit": Click or tap on the "Limit" option. This will unlock the "Limit Price" field, which is what we're here for!
Step 4: Set Your Limit Price
- This is where your strategic thinking comes into play. What's the exact price at which you're willing to buy or sell?
For a Buy Limit Order:
- You want to buy at a specific price or lower.
- Enter a price that is equal to or below the current market price.
- Example: If a stock is trading at $100, and you only want to buy it if it drops to $98, you would enter $98 as your limit price. Your order will not fill if the price stays above $98.
For a Sell Limit Order:
- You want to sell at a specific price or higher.
- Enter a price that is equal to or above the current market price.
- Example: If you own a stock trading at $100, and you want to sell it for a profit at $102, you would enter $102 as your limit price. Your order will not fill if the price stays below $102.
Step 5: Select Your Time in Force (TIF)
- The "Time in Force" dictates how long your order remains active in the market if it doesn't get filled immediately. This is an important consideration!
Here are the most common options on Charles Schwab:
Common Time in Force Options:
- Day: This is the default and most common setting. Your order is active only for the current trading day. If it's not filled by market close, it expires. This typically applies to the standard market hours (9:30 AM to 4:00 PM ET).
- Good Until Canceled (GTC): Your order remains active for a longer period, usually up to 60 calendar days (check Schwab's specific policy, as it can vary slightly). It will stay in the market until it's either filled or you manually cancel it. This is useful for long-term strategies where you're willing to wait for a specific price.
- Important Note on GTC: GTC orders are generally reset or canceled if there's a corporate action (like a stock split or dividend).
- Day + Extended Hours: This option makes your limit order active for the entire trading day, including pre-market and after-hours sessions. This is particularly useful if you anticipate price movements outside of regular market hours.
- Good Until Canceled + Extended Hours: Combines the longevity of GTC with the broader trading window of extended hours. Your order remains active for up to 60 days, covering both standard and extended trading hours.
- Fill or Kill (FOK): This order must be immediately and entirely filled. If it cannot be, the entire order is canceled.
- Immediate or Cancel (IOC): Any part of the order that can be filled immediately is filled, and any remaining, unfilled portion is canceled.
Consider your trading goals carefully when choosing your Time in Force. For most casual investors, "Day" or "GTC" are the go-to options.
Step 6: Review Your Order
- You're almost there! Before hitting that "Place Order" button, a thorough review is essential to avoid costly mistakes.
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Check All Details: Schwab's platform will present you with a summary of your order. Carefully review:
- Action: Buy or Sell
- Symbol: The correct stock
- Quantity: The number of shares
- Order Type: Confirm "Limit"
- Limit Price: Ensure this is your desired price
- Time in Force: Make sure it matches your preference
- Estimated Amount: This gives you an idea of the total cost or proceeds (before commissions/fees, if any).
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Understand Potential Outcomes: Remember, a limit order is not guaranteed to fill. If the stock never reaches your limit price, your order will simply expire.
Step 7: Confirm and Place Your Order
- Once you're satisfied that all the details are correct, it's time to submit your order.
- Click "Place Order" or "Confirm": This button will finalize your request.
- Order Confirmation: You'll typically receive an order confirmation message with a confirmation number. It's a good idea to make a note of this.
- Monitor Order Status: After placing the order, you can usually check its status under an "Order Status" or "Pending Orders" section on the Schwab platform. This will tell you if the order is "Open," "Partially Filled," "Filled," or "Canceled."
Important Considerations for Limit Orders on Charles Schwab
- Market Volatility: In rapidly moving markets, a limit order might not fill if the price moves past your limit very quickly. This is a trade-off for price control.
- Bid-Ask Spread: The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) is the bid-ask spread.
For illiquid stocks, this spread can be wide, making it harder for limit orders to execute. - Extended Hours Trading: Trading outside of standard market hours (pre-market and after-hours) can have lower liquidity and higher volatility. If you use "Extended Hours" TIF, be aware of these risks.
- Commissions and Fees: While online equity trades are generally $0 commission at Schwab, options and other asset types may have per-contract fees. Always review the estimated amount before placing your order.
- Canceling/Modifying Orders: You can usually cancel or modify open limit orders before they are filled. Go to your "Order Status" page and look for options to "Change" or "Cancel." Keep in mind that in fast markets, your order might fill before you can successfully cancel it.
Frequently Asked Questions (FAQ)
How to place a buy limit order on Charles Schwab?
To place a buy limit order, log in, navigate to the "Trade" section, enter the stock symbol, select "Buy," choose "Limit" as the order type, and then specify a limit price that is at or below the current market price.
How to place a sell limit order on Charles Schwab?
For a sell limit order, go to the "Trade" section after logging in, enter the stock symbol, select "Sell," choose "Limit" as the order type, and then set a limit price that is at or above the current market price.
How to change a limit order on Charles Schwab?
You can change an open limit order by going to your "Order Status" or "Pending Orders" section on the Schwab platform, selecting the order you wish to modify, and then clicking on the "Change" button. You can typically adjust the quantity, price, or time in force.
How to cancel a limit order on Charles Schwab?
To cancel a limit order, access your "Order Status" or "Pending Orders" section, locate the specific order, and click the "Cancel" button. Be aware that in volatile markets, the order might execute before your cancellation request is processed.
How to set a Good Until Canceled (GTC) limit order on Schwab?
When setting your limit order, in the "Time in Force" dropdown, select "Good Until Canceled" (GTC). This will keep your order active for up to 60 calendar days unless it's filled or you cancel it.
How to use extended hours with a limit order on Schwab?
When placing your limit order, select "Day + Extended Hours" or "Good Until Canceled + Extended Hours" from the "Time in Force" options. This will allow your order to be active during pre-market and after-hours trading sessions.
How to find my placed limit orders on Schwab?
After placing an order, you can usually find it by navigating to the "Order Status" or "History" section within your Charles Schwab account. This page will show all your open, partially filled, filled, and canceled orders.
How to choose the right limit price for my trade?
The right limit price depends on your trading strategy and market analysis. For buying, consider a price you believe represents a good value or support level. For selling, consider a target profit price or a resistance level. Research and charting tools can help.
How to handle a limit order that isn't filling?
If your limit order isn't filling, it means the market price hasn't reached your specified limit. You can choose to wait, modify the limit price (making it more aggressive), or cancel the order and place a market order if immediate execution is your priority.
How to understand the risks of using limit orders?
The primary risk of a limit order is that it may not fill if the market never reaches your specified price. This means you could miss out on a trading opportunity. Additionally, while it protects you from unfavorable prices, it doesn't guarantee execution.
