Catching the Life of a GTC Order: From Placement to Execution - A Sneak Peak into its Journey in the Stock Market

Discover how GTC (Good 'Til Cancelled) orders can benefit your trading strategy. With GTC orders, you can set buy or sell orders that remain active until executed or cancelled manually. Learn how to maximize your investment opportunities with this powerful and flexible order type.

The Term: GTC Order

Introduction

A GTC order refers to a type of stock market order that stays active indefinitely until it is executed or manually canceled by the investor. GTC stands for 'Good 'Til Cancelled' and it is one of the most commonly used order types by traders and investors.

Understanding GTC Order

When placing a GTC order, the investor specifies the price at which they want to buy or sell a particular stock, as well as the quantity desired. The order remains effective until one of three occurrences:

Execution

If the stock reaches the specified price, the GTC order is executed and completed automatically.

Manual Cancellation

The investor can choose to cancel the GTC order at any time before it is executed. This provides flexibility to react to changing market conditions or to reconsider the trade.

Expiration

Although the term 'Good 'Til Cancelled' may seem to imply that the order never expires, GTC orders do have an expiration date set by the brokerage firm, typically ranging from 30 to 90 days. If the order is not executed or cancelled before this expiration date, it is automatically canceled.

Advantages of GTC Orders

GTC orders offer several key advantages for investors:

Automation

GTC orders allow investors to automate their trading strategies and take advantage of opportunities even when they are not actively monitoring the market.

Flexibility

GTC orders provide flexibility by allowing investors to set their desired buy and sell prices in advance, which helps to eliminate the emotional aspect of trading.

Convenience

Instead of constantly placing new orders every day, investors can use GTC orders to set up their trades once and let the market handle the execution.

Conclusion

In summary, a GTC order is a type of stock market order that remains in effect indefinitely until it is executed, manually cancelled, or reaches the expiration date set by the brokerage firm. This order type is a popular choice among investors due to the automation, flexibility, and convenience it provides.

Previous term: Day Order