Key Takeaways
- Order stays active until executed or canceled.
- Ideal for long-term price targets.
- Automatically expires after 30-90 days.
- Requires periodic review to avoid unwanted fills.
What is Good 'Til Canceled (GTC)?
A Good 'Til Canceled (GTC) order is a trading instruction to buy or sell a security at a specified price that remains active until it is executed, manually canceled, or expires after a broker-set period. Unlike a day order which expires at the end of the trading session, a GTC order stays open across multiple days or weeks.
This order type allows you to set target prices without needing to re-enter orders daily, making it useful for long-term trading plans and automated execution.
Key Characteristics
GTC orders have distinct features that differentiate them from other order types:
- Duration: Remains active until filled, canceled, or expired, typically lasting 30 to 90 days depending on your broker.
- Order Types: Often used with limit or stop orders to specify execution prices precisely.
- Brokerage Policies: Some brokers automatically cancel GTC orders after a set period or at calendar quarter end.
- Automation: Eliminates the need for daily order re-entry, helping investors maintain disciplined entry or exit points.
- Comparison: Differs from immediate or cancel orders, which require instant execution or are canceled immediately.
How It Works
When placing a GTC order, you select the security, quantity, order type, and price, then designate the order as GTC to extend its duration beyond a single trading day. The order sits in the system and activates only when market conditions meet your specified price.
Execution occurs during regular market hours, and the order remains live until filled fully or partially, canceled by you, or automatically expired by the brokerage. Regular review is essential to ensure your GTC orders align with evolving market conditions and your investment goals.
Examples and Use Cases
GTC orders are practical in various trading scenarios, especially for patient investors or those targeting specific price points.
- Airlines: Investors might set a GTC buy order for shares of Delta when the price dips to a preferred level, allowing automatic execution without daily monitoring.
- Growth Stocks: Setting GTC orders on stocks featured in best growth stocks lists helps capture entry points amid market volatility.
- Large Cap Holdings: Use GTC orders for established companies like those in the best large-cap stocks category to automate profit-taking or accumulation strategies.
Important Considerations
While GTC orders provide convenience and automation, they carry risks if left unchecked. Market conditions can change significantly, leading to execution at unfavorable prices. It's advisable to periodically review and adjust GTC orders to reflect current market realities.
Additionally, understanding your broker’s specific rules on order expiration and fees is crucial. Implementing complementary risk controls, such as stop-loss orders or consulting resources on call options, can enhance your trading strategy.
Final Words
Good 'Til Canceled orders let you set price targets that remain active beyond a single trading day, reducing the need for constant monitoring. Check your broker’s expiration policies and regularly review your open GTC orders to avoid unintended executions or stale positions.
Frequently Asked Questions
Good 'Til Canceled (GTC) is a type of trading order that remains active across multiple trading sessions until it is executed, manually canceled, or expires due to brokerage limits. It allows traders to set a target price without needing to re-enter the order daily.
GTC orders usually stay active for an extended period, often between 30 to 90 days, depending on the brokerage. Some brokerages may cancel them at the end of the following calendar quarter to avoid stale orders.
Unlike day orders that expire at the end of the trading day if unfilled, GTC orders remain active until filled, canceled, or expired by the brokerage. This makes GTC orders ideal for long-term price targets without constant monitoring.
Yes, the GTC designation controls the order duration and can be applied to various order types like limit orders or stop orders. This flexibility helps traders automate their strategies over longer periods.
One risk is that unmonitored GTC orders may execute under changed market conditions, potentially leading to unintended trades. It's important to review GTC orders periodically and consider pairing them with stop-losses for risk management.
GTC orders activate during market hours when the specified price conditions are met, such as the stock price reaching the limit set by the trader. They will execute automatically without needing daily re-entry.
Brokerages typically auto-cancel GTC orders after a set period, usually 30 to 90 days, or at the end of a calendar quarter, depending on the brokerage's policies. Traders can also manually cancel these orders anytime.
GTC orders are well-suited for traders with long-term price targets or those wanting to automate buying dips or profit-taking without daily monitoring, especially in volatile markets where prices fluctuate frequently.
