What type of order allows an investor to buy a security at a maximum specified price?

A limit order is a type of order that specifies the maximum price an investor is willing to pay for a security. By using a limit order, the investor sets a clear boundary and ensures that they will not pay more than that specified price when buying the security. This type of order protects the investor from sudden price increases and allows for better control over the purchase price.

In contrast, a market order does not set a price limit and instead executes the trade at the current market price, which could be higher than the maximum price an investor is willing to pay. A stop order serves a different purpose, functioning as a trigger for a market order once the security reaches a specified price. Lastly, a fill or kill order mandates that the entire order be executed immediately at the specified price or not at all, which can create different execution dynamics compared to a limit order.