What type of order instructs a broker to buy when a stock reaches a specified price?

A limit order is designed to buy or sell a stock at a specific price or better. When an investor places a buy limit order, it instructs the broker to purchase the stock only when its price falls to the specified level or lower. This allows the investor to control the maximum price they are willing to pay for the stock, ensuring they do not buy at a price higher than their designated limit.

In contrast, a market order would execute immediately at the best available current price, without regard to any specific price target. A stop order, on the other hand, becomes a market order only once the stock reaches the designated stop price, primarily used to limit losses or lock in profits. A day order is simply an order that remains valid for the trading day unless executed or canceled, but it does not specify a particular price to trigger the order's execution. Hence, the limit order is the only type that specifically instructs a broker to act based on achieving a specified price point for buying a stock.