A limit order can only be executed at your specific limit price or better. Investors often use limit orders to have more control over execution prices.

Keep in mind, limit orders aren't guaranteed to execute. There has to be a buyer and seller on both sides of the trade. If there aren't enough shares in the market at your limit price, it may take multiple trades to fill the entire order, or the order may not be filled at all.

Depending on the final price your order is filled at, the final dollar amount of your order may change from what is estimated in the app.

Robinhood defaults to share-based or dollar-based. Share-based and dollar-based orders can default to market or limit orders depending on the time of day and order side.

The following shows the default order behavior for trading during regular market hours versus extended-trading hours with Robinhood. Orders submitted during the overnight trading hours, or when the market is closed, are queued for market open and therefore follow the Market hours order schedule.

*Over-the-Counter (OTC) securities are an exception and will remain as limit orders during all trading sessions.

The default order type when entering an equity order may be either:

• A market order
• A limit order with a preset limit price set at 2% or 5% above (if a buy order) or 2% or 5% below (if a sell order) the last reported trade price for the security on a Nasdaq exchange (i.e., The Nasdaq Stock Market, NASDAQ OMX BX, or NASDAQ OMX PHLX) at the time the order was entered. While this is a preset limit price, you can always adjust the limit price at order entry.
• A limit order with a limit price set by you

Robinhood uses the following rounding formulas to determine the limit price for a limit order with a preset limit price:

• The last trade price for the security is multiplied by 1.02 or 1.05 (for buy orders) or 0.98 or .95 (for sell orders); and
• If the last trade price is over $1, rounded down to 2 decimal places (for buy orders) or rounded up to 2 decimal places (for sell orders); otherwise, rounded down to 4 decimal places (for buy orders) or rounded up to 4 decimal places (for sell orders).

You can review the preset limit price on the order review summary screen.

For buy orders, the limit price is set at 5% above the last trade price on a Nasdaq exchange (the Nasdaq Stock Market, NASDAQ OMX BX, or NASDAQ OMX PHLX). For sell orders, the limit price is set at 5% below the last trade price on a Nasdaq exchange.

These limit orders, where we preset the limit price, are designed to execute at the same price and speed as market orders. Unlike market orders, they have the added benefit of price protection in fast moving or less liquid markets (which is especially helpful during extended-hours trading) because they won’t execute at a price that is worse than the limit price. Finally, our venues only support limit orders during extended hours, so these orders enable you to trade during extended hours.

Trading during extended and overnight hours comes with additional risks such as lower liquidity and higher volatility. You can learn more in the Extended-Hours Trading Disclosure.

Fractional shares are not liquid outside of Robinhood and not transferable. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section in our Customer Agreement.

Not all securities are eligible for the entry of fractional orders during Robinhood’s extended-hours trading. If a security isn’t eligible, the order will be queued for the opening of market hours.

You can learn more about eligible securities and the risks of extended-hours trading in Extended-hours trading and for overnight hours in Robinhood 24 Hour Market.