What's the difference between a buy limit and stop

A buy limit order and a buy stop order are both used to control the price at which an investor buys a stock. However, they function in different ways:

1. Buy Limit Order:
   • A buy limit order is an instruction to purchase a stock at or below a specified price.
   • It guarantees that the investor will pay the buy limit order price or less, but it does not guarantee that the order will be filled if the stock does not reach the specified price.
   • This order type is useful when an investor expects the price to decline and wants to ensure they do not overpay for a stock.
2. Buy Stop Order:
   • A buy stop order is an instruction to buy a stock if it reaches a specified price above the current market price.
   • It is typically used to limit losses by setting a price at which the investor wants to enter a position if the stock starts to move in the desired direction.
   • If the stock price does not reach the specified price, the buy stop order will not be triggered.

In summary, a buy limit order sets a price at which the investor is willing to buy, while a buy stop order sets a price level at which the investor will enter a position if the stock reaches that level.