Recently, I’ve seen quite a few discussions in trading communities about GTC orders (Good Till Cancelled Orders), and I think this tool is definitely worth a deeper look.

Simply put, a GTC order is when you set a target price and leave it hanging there until it gets filled or you manually cancel it. Unlike day orders that automatically expire at market close, a good till cancelled order can exist across multiple trading days, sometimes even for weeks.

I’ve seen many traders use this feature to automate their trading. For example, you like a certain stock but think the current price of $55 is a bit high, and your ideal buy price is $50. Instead of watching it every day, you can just place a GTC buy order at $50. Once the stock drops to that level, the order automatically executes, and you don’t have to monitor it daily. Conversely, if you hold a stock currently at $80 and want to sell at $90 to lock in profits, setting a GTC sell order does the job.

But this tool isn’t without risks. The most common issue is accidental execution. For instance, if a stock jumps on after-hours news and gaps down, a GTC sell order set at $58 might get filled instantly at $50, which is far from your expected price. Market volatility can also trigger your orders unexpectedly, especially around earnings reports or major economic events.

Another thing to note is that GTC orders don’t last forever. Most brokers automatically cancel unfilled orders after 30 to 90 days to prevent accumulation. So if you set a long-term target, you need to periodically check whether your order is still active.

Compared to day orders, which expire at market close the same day, GTC orders are suitable for those aiming to wait for a specific price regardless of how long it takes. But you need to review them from time to time to ensure market conditions haven’t changed enough to make your strategy invalid.

Overall, good till cancelled orders are a convenient tool that allows you to execute trades without watching the market constantly. However, automation comes with the cost of losing manual judgment, so proper risk management is essential. Regularly adjusting and monitoring your open orders is key to truly leveraging the advantages of GTC.