Understanding Good 'Til Canceled (GTC) Orders and Their Strategic Value

Dive deep into Good 'Til Canceled (GTC) orders, their strategic uses, benefits, and risks. Discover how these orders can streamline your investment strategies and day-to-day portfolio management.

Good ’til canceled (GTC) is a type of order that allows investors to buy or sell a security and keep the order active until either the order is filled or manually canceled by the investor. While these orders provide extended flexibility and control over trading strategies, brokerages generally set a maximum time frame of up to 90 days for a GTC order to remain active.

Key Points

  • Persistent Orders: A GTC order remains active across trading sessions until canceled.
  • Enhanced Convenience: Simplifies portfolio management by reducing the need for daily oversight.
  • Risk Management Tool: Traders can place orders to activate at specific price points, mitigating risks associated with sudden market shifts.

The Mechanics of GTC Orders

GTC orders provide a durable alternative to day orders, which cease to exist at the end of the trading day if not executed. By contrast, GTC orders do not stay active indefinitely as their longevity typically ranges from 30 to 90 days after placement to mitigate the risk of forgotten orders being unexpectedly filled.

Streamlined Portfolio Management

For investors who do not track stock prices constantly, GTC orders can be set at predefined price thresholds, empowering traders to capitalize on market movements even when they are not actively monitoring their investments. Indeed, GTC orders can serve as stop orders to limit potential losses by setting sell orders below the market price and buy orders above it.

Order Execution

Under standard conditions, GTC orders execute at the specified limit price. However, in cases of significant overnight price movements, the order fulfills at a price that may benefit the investor – higher for sell orders and lower for buy orders.

Potential Pitfalls of GTC Orders

Some exchanges, including NYSE and Nasdaq, have phased out GTC orders due to inherent risks associated with them – primarily execution during volatile periods. Such trades might happen at disadvantageous prices caused by short-term market fluctuations. Nevertheless, many brokerage firms continue to offer GTC and stop orders, handling such transactions internally.

Volatility Risk

A key risk of GTC orders surfaces during periods of extreme volatility. For instance, a sudden price dip might activate a sell-stop order, only to rally immediately after. This could result in selling low and missing out on a recovery, presenting a financial challenge for investors aiming to restore their position.

Practical Example

Consider a scenario where an investor aims to buy shares trading at $100 each but prefers to invest only at $95 or lower. By placing a GTC buy order at $95, if the market hits this price before the order is canceled or expires, the trade executes automatically, ensuring the investor acquires the shares at their desired price point.

Ultimately, GTC orders offer significant strategic advantages, simplifying the intricacies of perpetual market surveillance and allowing missed opportunities due to ongoing market volatility to be effectively managed.

Related Terms: Day Orders, Immediate or Cancel Orders, Limit Orders, Stop Orders.


  1. Nasdaq. “How to Survive the Markets Without Stop-Loss Orders”.
  2. New York Stock Exchange. “Elimination of Stop and GTC Order Types”.

Get ready to put your knowledge to the test with this intriguing quiz!

--- primaryColor: 'rgb(121, 82, 179)' secondaryColor: '#DDDDDD' textColor: black shuffle_questions: true --- ## What does GTC stand for in trading terminology? - [ ] Good To Continue - [ ] Great Trade Condition - [ ] Generic Trading Code - [x] Good 'Til Canceled ## In trading, a GTC order remains active until when? - [x] It is executed or canceled - [ ] The end of the trading day - [ ] The end of the trading week - [ ] The end of the trading month ## What is a characteristic feature of a GTC order? - [x] It remains active indefinitely until fulfilled or canceled - [ ] It expires at the end of the trading session - [ ] It requires daily re-submission - [ ] It is automatically executed at market open ## Can a GTC order be partially filled? - [x] Yes, it can be partially filled and remain active for the unfulfilled portion - [ ] No, it must be executed in full or not at all - [ ] Only if specified by the trader - [ ] Only on certain exchanges ## What is one advantage of using a GTC order? - [ ] It reduces the need for continuous monitoring of the market - [x] It does not require re-entering the order daily - [ ] It guarantees execution by the end of the trading day - [ ] It ensures execution at the desired price ## Which type of trader is most likely to use GTC orders? - [ ] Day traders - [ ] Floor traders - [ ] Wash sale traders - [x] Long-term investors ## What is a possible downside of a GTC order? - [ ] It requires constant monitoring - [ ] It forces daily re-entry of the order - [ ] It limits order to one trading day - [x] It may be forgotten and remain active unintentionally ## How are GTC orders typically canceled? - [ ] They are automatically canceled at the end of the week - [ ] They cannot be canceled once placed - [x] The trader must manually cancel them - [ ] The broker cancels them after 30 days ## Which market condition might affect the execution of a GTC order? - [x] Sudden changes in market prices - [ ] Broker inactivity - [ ] Weekend trading only - [ ] Quarterly earnings reports ## Are GTC orders applicable to all types of securities? - [ ] No, they are restricted to equities only - [ ] No, they are only for futures trading - [x] Yes, they can be used for various types of securities - [ ] No, they are only available in forex trading