A Good Til Canceled (GTC) order is an order to buy or sell a security that remains active until either the order is filled or the investor cancels it. Brokerages typically limit the maximum time you can keep a GTC order open to 30 to 90 days. GTC orders are an alternative to day orders, which expire if unfilled at the end of the trading day. GTC orders allow traders to specify a purchase or sell order that will remain in effect until the trader manually cancels the order or until the order is filled.
Some key features of GTC orders include:
- Flexibility: GTC orders offer traders flexibility in managing their trades, as they can be canceled or modified at any time before they are executed.
- Risk: Because GTC orders remain active until they are filled or canceled, they may expose traders to more risk than day orders. The market may move in the opposite direction, and the trader may miss out on better opportunities to buy or sell.
- Management: Because GTC orders expose traders to more risk than day orders, they require more management to minimize potential losses. This is not a set-and-forget type of order.
- Fees: Some brokers may charge additional fees for GTC orders. Traders should check with their broker to determine whether there are any fees associated with this type of order.
Overall, GTC orders can be a useful tool for traders looking to save time and take advantage of potential price movements outside of regular trading hours. However, they also expose traders to additional risk and fees, and may not always be filled as expected.
