October 21, 2008 by admin
Good Til Cancel Order Type
Good Til Cancel Definition
A good til cancel (GTC) order is a buy or sell order that remains in effect until executed or canceled. This does not mean the order will remain in queue indefinitely. The majority of brokerage firms will only allow an order to stay active for 30-90 days. The GTC order type can be tagged on limit, stops, and stop-limit orders.
Who Uses Good Til Cancel Orders
GTC orders are primarily used by long term investors. This is because the trader may not actively monitor the markets on a daily basis, but would lilke to keep the order in the market in the event the price target is met.
Good Til Cancel Trading Example
Below is a chart of Yamana Gold (AUY). Notice how the stock took a noise dive from $16 to $5. A trader who placed a good-til-cancel order to buy to cover at $5 dollars could have left their trading desk in July without ever having to check the stock again. The GTC order would have allowed the trader to make nearly 70% by mid-October without ever having to monitor the markets after the order was placed.
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