Why use a limit order when trading ETFs?

A limit order is an instruction to buy an ETF at or below a specific price, or sell at or above a specific price. Unlike a market order, it won't fill at a worse price than you set.

This matters for ETFs because trading costs often show up as bid-ask spreads. In liquid ETFs, spreads are small, but in smaller, niche, or bond ETFs, spreads can widen and market orders can fill at surprisingly bad prices.

Using limit orders is especially useful near the open/close, during news-driven volatility, or when the underlying market is less liquid. It's a simple habit that can improve execution quality without changing your investment thesis.