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What is Good 'Til Canceled?

Updated on September 22, 2023 , 277 views

A Good Til Cancelled (GTC) order is a purchase or sell order that remains in effect until it is executed or cancelled. Brokerage companies usually have a restriction on how long an investor can keep a GTC order active.

Good 'Til Canceled

This time Range may differ from one broker to the next. Investors should check with their brokerage providers to see whether there is a time restriction on GTC orders.

Example of GTC

GTC orders are typically placed by investors who desire to purchase at a lower price than the prevalent Market price or sell at a higher price than the current trading level. If a company is now trading at INR 1000 per share, an investor can place a GTC purchase order for INR 950. The trade will execute if the market advances to that level before the investor cancels or the GTC order expires.

How does GTC Feature Work?

GTC orders feature works on the Basis of client instructions to place the buy and sell orders in a specified script for the specified length of time, assuming that the total quantity has not been executed. Day orders, which expire if not completed before the end of the trading day, can be replaced by GTC orders.

GTC orders, despite their name, rarely last forever. To avoid a long-forgotten order being abruptly completed, most brokers set GTC orders to expire 30 to 90 days after investors submit them. It allows investors who may not be able to maintain track of stock prices on a daily basis to place buy or sell orders at certain price points and hold them for several weeks.

The transaction will execute if the market price meets the price of the GTC order before it expires. It can also be used as stop orders, which establish sell orders below market price and purchase orders above market price in order to limit losses.

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The majority of GTC orders execute at the price or limit price set in the order. However, there are certain exceptions. If the price per share fluctuates between trading days, skipping over the GTC order's limit price, the order can prove to be more advantageous to the investor, that means at a higher rate for GTC sell orders and a lower rate for GTC purchase orders.

GTC Vs. Day Order

When an order is executed or when a time period expires, it is cancelled. If a Day Order is not completed before the end of business on the same day it was placed, it is cancelled. When placing an order, you may also choose to leave the time period blank. A GTC order is one that has no expiration date.

All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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