An example of how by placing a limit order can reduce your
risk is as follows: If a company has announced that it is going to go public (IPO) and has projected an initial opening price on the first day of
trading at $ 15, it is possible that if you place a market order to buy this stock on that day, you may end up paying $ 45
per share, an execution price
substantially away from the market price of the stock at the time the order was placed, or in this case, the projected market price of the stock.