What is Buying Limit in Share Trading?

What is Buying Limit in Share Trading in Stock Market? Is BL and Buy Limit Order Same?

Understand What is Buying Limit in Share Trading in Stock Market? How is it Good or Bad for an Investor. Is BL and Buy Limit Order Same?

What is Buying Limit in Share Trading in Stock Market?

Buying Limit or BL is the amount of money that you set set aside from your bank account for share trading + (plus) the amount realized from the sale of any shares you may have previously made – (minus) any purchases you have made.

Buying Limit tells an investor his limit for a given settlement for the desired stock exchange.

Read:

• What is Intraday Share Trading?
• Intraday Trading Tips and Strategies for Beginners

Example

Suppose you have Rs. 1,00,000 in your Bank A/C and you set aside Rs. 50,000 to purchase shares. Here your Buying Limit is Rs. 50,000.

If you have sold shares worth Rs. 1,00,000 on the Treading Day or the day before, your BL goes upto Rs. 1,50,000. This means that you can buy shares worth Rs. 1,50,000. If you buy shares worth Rs. 50,000 on the Trading Day then your BL gets reduced to Rs. 1,00,000.

• Also Read: Introduction to Stock Market in India

Is Buying Limit and Buy Limit Order Same?

No, BL and Buy Limit Order are NOT the Same. Both are Different Stock Market Terminology.

As I explained above, BL is the Amount that an Investor has in Hand to Buy Stocks or Shares.

Whereas, a Buy Limit Order a type of order to Buy or Sell a Security at a Specific Price or Better Price. By placing a Buy Limit Order, as Investor don’t have to constantly monitor the Stock Market.

• Also Read: Types of Orders in Stock Market in India

FAQs: Buying Limit

Conclusion

I hope now you understand What is Buying Limit in Share Trading in Stock Market and Difference between the two.

Please feel free to ask any question in the Comment Section below.

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