Applicable Limit Price Clause Samples

The Applicable Limit Price clause defines the maximum or minimum price at which a transaction, such as the purchase or sale of a security or commodity, can be executed. In practice, this clause sets a price threshold that must not be exceeded or undercut during the execution of an order, ensuring that trades only occur within acceptable price boundaries. For example, a buy order may specify a limit price above which the buyer is not willing to purchase, or a sell order may set a minimum price below which the seller will not sell. The core function of this clause is to protect parties from unfavorable price movements and provide certainty regarding the terms of execution.