A limit order is an order placed on an exchange whereby a user specifies a price they are willing to buy or sell at (and a time period for which the limit order remains active). A “limit order” is often called a standing order.
For example, suppose a customer wishes to buy 100 shares of Stock A. The current “ask” is $5 (with 1000 shares available at that price). But the customer doesn’t want to spend $5 for that stock, so they post a “limit order” for $4.98. The limit order becomes effectively an announcement that says “I am willing to buy 100 shares for $4.98/share”. If a seller is willing to sell at that price, they will match the limit order.
Limit orders are a form of providing liquidity into a market. In many exchanges such as Kalshi, people placing limit orders face lower (or zero) fees. The disadvantage of a limit order is that one will often have to wait until an order is matched, and there is some risk in that time that the price either falls or rises and the limit order becomes severely mispriced. The advantage is that traders can be rewarded with superior prices and lower fees if they are willing to be patient.