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Why Was My Limit Order Executed at the Market Price Instead of the Specified Limit Price?

Post Date : August 18, 2025

A limit order is one of the most widely used order types in trading. It gives traders control over the price at which they wish to buy or sell a security. However, there are instances where clients are surprised to see their limit orders executed at a different price—usually better—than what they initially specified. This often leads to the misconception that the order was executed at market price.

This blog explains why such executions occur and how the exchange’s matching engine works to benefit the trader.

Understanding Limit Orders

A limit order allows a client to place a trade at a pre-determined price or better. This means:

• A buy limit order is executed at the limit price or lower.
• A sell limit order is executed at the limit price or higher.

Importantly, the execution never happens at a worse price than the one specified in the order.

Example Scenario

Let’s consider a stock—State Bank of India (SBIN)—with the following market data:

• Last Traded Price (LTP): ₹185.40
• Best Bid (Buy): ₹185.35
• Best Offer (Sell): ₹185.40

Now, examine these two scenarios:

1. Buy Limit Order at ₹190
   since there is already a sell offer at ₹185.40, your order is matched with the existing seller. Hence, your buy order is executed at ₹185.40, which is ₹4.60 lower than your intended price.
2. Sell Limit Order at ₹180
   If there’s an active buy bid at ₹185.35, your sell order is matched at ₹185.35, which is ₹5.35 higher than the specified price.

In both cases, the limit order executed at a better price, as per standard market mechanism. This is not a failure or error—it is how the order matching engine is designed to function efficiently.

How does order Matching Works

All orders are matched through the exchange’s central order book. The engine is designed to execute trades at the most favorable price available at the time:

• For buyers, this means the lowest available sell price (best offer).
• For sellers, it means the highest available buy price (best bid).

When your limit order can be matched immediately at a better price, it is executed accordingly. This is standard functionality and ensures faster trade execution while maximizing benefits to the trader.

What If You Want to Execute Only at the Specified Limit Price?

If you intend to buy or sell strictly at a specific price, and not benefit from better price offers, you must use trigger-based orders instead of standard limit orders.

Available Trigger-Based Orders at RMoney

1. GTT (Good Till Triggered) Orders
   These remain active for up to 90 days and are ideal for long-term traders who want their orders to be executed only when a particular price level is reached. To learn more, see What is the Good Till Triggered (GTT) feature?
2. Stop-Loss (SL) Orders
   These orders remain valid for the trading day and are generally used for intraday protection or to enter trades when a specific price is triggered. To learn more, see What are stop loss orders and how to use them?

In both cases, the order is not immediately placed in the order book. Instead, it is sent only once the trigger condition is met, ensuring more precise control over execution.

Example

If you want to buy SBIN only when it reaches ₹190, a GTT or SL Buy Order with:

• Trigger Price: ₹190
• Limit Price: ₹190 (or market, based on your preference)

System will ensure that the order gets executed only when SBIN touches ₹190.

Similarly, if you wish to sell only at ₹180, use a GTT or SL Sell Order with ₹180 as the trigger.

Conclusion

Seeing a limit order executed at a different price—usually better than the specified one—is a result of the market functioning in your favor. The exchange’s matching engine prioritizes best prices, which means you might get a better deal than you anticipated.

However, if your trading strategy demands precision and execution strictly at a specific price point, it’s advisable to use trigger-based orders such as GTT or Stop-Loss orders.

For more information, contact RMoney at 0562-4266600 / 0562-7188900 or email us at askus@rmoneyindia.com