Limit orders are used to cap the price you are willing to sell or purchase a security for. You can place a limit price for both buy and sell orders, outlined below.
Buy Limit Orders
For a buy order, a limit specifies the most you are willing to pay for a security. For example, if XYZ option is trading at $1.50 per contract and the most you are willing to pay is $1.40 per contract, you could put a limit order for $1.40 and the trade would not execute until there is a seller willing to match your price.
Sell Limit Orders
On a sell order, a limit specifies the least you are willing to accept in order to sell a security. For example, if XYZ contract is trading at $2.50 and the least you are willing to accept is $2.75, you can put on a sell limit at $2.75 and you will not sell your position until there is a buyer willing to pay that price or greater.