Not yet live, it waits its cue:price reaches the level, and it goes through.
An order to open a position at a future price level rather than the current market price.
Types include buy limit, sell limit, buy stop, and sell stop orders.
In plain words
A pending order is an instruction that waits: it names a price, and it acts only if the market reaches that price. Limit orders wait for a better price than the current one and stop orders wait for a worse one, so a buy limit sits below the market and a buy stop above it, with sell orders the other way round.
See it move
Current price has reached Buy stop
Why it matters
Pending orders let a trader set entries and exits in advance without watching the screen. A limit order fills at its price or better, while a stop order becomes a market order when triggered and may fill at a different price in a fast market or after a gap.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
The market is at 1.2000 and a trader places four pending orders.
- 1Buy limit at 1.1950 and sell stop at 1.1940both below the market
- 2Sell limit at 1.2050 and buy stop at 1.2060both above the market
- 3The price rises to 1.2050the sell limit can fill, and the buy stop is still waiting 10 pips higher
Only the order whose price has been reached acts; the other three stay pending until they are reached, cancelled or expire.
A common mistake
A buy stop and a buy limit are easily confused. Both buy, but the limit waits for a lower price and the stop waits for a higher one.
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Educational information, not investment advice or a recommendation to trade.