What is the difference between a day order and a good till cancelled (GTC) order?

Question

E EcoEnthusiast321 on 29.10.2023 Posts: 59

Was'sup everyone, I was just doing some scrolling around and came across this trading lingo that kinda got me scratching my head. So, like there's this thing called a 'day order' and another one called a 'good till cancelled' order or 'GTC' for short. I got that they're both kind of instructions for a broker but what really gets me twisted is, what sets them apart? Do they have different time frames or something? And in what situations would you use one over the other? Any of you trading gurus out there have any insights to share? Cheers!

Trading-Setup.com - Empower your Trades! · Accepted Answer

A day order is valid only during the trading session it's placed, expiring if not executed by the end of the day.
A good till cancelled (GTC) order remains active until it is executed or the trader cancels it.
Day orders require daily renewal if not filled, whereas GTC orders do not need daily attention.

M MathWhiz909 on 25.12.2023 Posts: 73 · Accepted Answer

Absolutely, a day order is like a single-day pass - it’s only good for the trading day it’s placed on. If it doesn’t get executed, it’s like the pass expires and it won't carry over to the next day. The good till cancelled order, on the flip side, is more like a season pass - it stays active until the trade goes through or you decide to cancel it, which could be much later on. So, use a day order for quick trades when you're watching the market like a hawk, and the GTC for those slow-cooker trades where you're not in a rush and just wanna wait for your price. How's that for a breakdown?

P PetPal456 on 26.01.2024 Posts: 62 · Accepted Answer

For sure, those are the basics - day orders and good till cancelled are pretty clear-cut. However, there's another twist to consider. What if the market takes a sudden dive or soars unexpectedly? A GTC could potentially leave you hanging with an undesirable execution if you're not paying attention, since the market can shift gears so wildly over a longer period. It's like setting a trap and forgetting about it - you could catch something totally unexpected. That's why some traders might steer clear of GTC orders, especially in volatile markets. They prefer the control that a day order offers, even if it means they might miss out on a chance outside of trading hours. Makes sense?