Dear Hard Money,
I am writing to you anonymously for reasons that will become clear.
For the past twenty years, I have been employed as a strategist for a well known hedge fund. The clients we cater to typically have a minimum net worth of $10M and our actions in the market regularly make the news. Ever since I started on Wall Street as an investment banking analyst, two decades ago, I’ve been completely dedicated to the world of finance, and I’m proud of what I’ve accomplished. However, despite all my success, I can’t seem to figure out what a limit order is.
While studying at Yale, I had a pretty solid understanding of just about every aspect of economics, from supply and demand, perfect and imperfect competition, taxation, international trade, monetary policies, exchange rates, interest rates, etc. but for some reason, whenever limit orders were touched on, I just couldn’t figure them out. I asked fellow students to help me, but they always assumed I was making a joke. I became known as “limit Larry” at parties and people would say things like “do the limit order bit!” I got every question about them wrong on tests, but I still managed to graduate with distinction because I had no problem with the rest of the curriculum.
Seriously, what the hell are they? I just can’t figure it out. What is the limit on? Is it something to do with risk assessment? Who are you ordering to do what? I’m in way too deep to ask my colleagues for help at this point, and forget about embarrassing myself in front of my wife, yet I must find a solution, because I feel like any day now, not understanding limit orders could lead to professional disaster. I’ve survived up until now because any time someone asks me to make a limit buy or sell (both of which I am equally confused by) I delegate the task to someone else. This odd practice actually worked in my favor early in my career because my assertiveness impressed my bosses and they gave me more responsibility.
If you guys could somehow explain it to me, I’d really appreciate it. Make haste because I feel like Ted is onto me. He keeps saying things in meetings like “hey, how would you explain a limit order to a ten year old? My son has been asking me.” I might be forced to have him killed.