Good ‘Til Canceled (GTC)

Good ‘Til Canceled (GTC)

Good ‘Til Canceled (GTC) orders let investors place buy or sell orders that remain open until they either execute at the specified price or the investor cancels them. Unlike day orders, which expire at the end of the trading day, GTC orders persist beyond a single session—although most brokerages set an automatic expiration (commonly 30–90 days) to avoid long-forgotten orders being filled.

How GTC Orders Work

• You set a limit price (buy below the market or sell above it).
• The order sits in the broker’s system and executes if the market reaches the specified price during the order’s active period.
• If the price gaps past your limit between trading sessions, the order may fill at a more favorable price (higher for sells, lower for buys).
• If the order never reaches the limit before expiration, it is canceled automatically or remains inactive until you renew it.

Key Features

• Stays active beyond a single trading day (subject to broker-set expiry).
• Useful for investors who don’t want to monitor prices constantly.
• Typically executed at the limit price, with possible improvement if the market gaps past the limit.
• Not universally accepted by exchanges; many brokerages manage GTC orders internally.

Risks and Limitations

• Exchanges such as the NYSE and Nasdaq have removed certain GTC and stop order types, citing risks during volatile conditions. Many brokerages continue to offer them internally, but execution policies vary.
• In extreme volatility, prices can move past your limit and then reverse—this can cause an unwanted execution (for example, selling into a temporary dip and missing the rebound).
• Forgotten or poorly managed GTC orders can result in trades at inopportune times; check your broker’s expiration policy and actively manage open orders.

Example

If a stock trades at $100 and you want to buy only if it drops, you might place a GTC buy limit at $95. The order will execute if the market reaches $95 while the order is active (or at a better price if the market gaps below $95).

Practical Considerations

• Confirm your broker’s GTC expiration policy (commonly 30–90 days).
• Use GTCs when you want to target specific entry or exit prices without daily monitoring.
• Combine with other order types (e.g., stop-limit) or active order management to limit risk in volatile markets.

Bottom Line

GTC orders offer convenience and the ability to set price-specific trades that persist beyond a single trading day. They can be effective for executing a plan without constant monitoring, but they carry risks—especially during volatile market conditions—and are not supported in the same way across all exchanges. Understand your broker’s policies and monitor open GTC orders to avoid unintended executions.