What Is a Good ‘Til Cancelled (GTC) Order?

A Good ‘Til Cancelled (GTC) order is an instruction given to a brokerage firm to buy or sell a security. This order remains active in the market until executed at the specified price or explicitly canceled by the investor. It allows investors to manage their goals without continuous market monitoring, useful for acquiring or disposing of assets at predetermined prices over an extended period.

Understanding Good ‘Til Cancelled Orders

A Good ‘Til Cancelled (GTC) order is designed to persist across multiple trading sessions, unlike a “day order” which automatically expires if not filled by the end of the trading day. It stays active in the market’s order book, waiting for the security’s price to reach the desired level. This enduring presence allows investors to set specific price targets for buying or selling, keeping the order open for days, weeks, or even months.

This order is useful for investors with a target price who are willing to wait for market conditions to align, rather than needing immediate execution. For instance, if an investor believes a stock is overvalued but would be a good buy at a lower price, they can place a GTC buy order at that specific, lower price. If the stock declines to that level before the order is canceled or expires, the trade will automatically execute.

Managing GTC Orders

Placing a GTC order typically involves selecting this option when submitting a buy or sell instruction through a brokerage platform. Investors usually specify the security, the quantity, and the precise price at which they wish the transaction to occur.

Modifying an active GTC order, such as adjusting the price or quantity, often requires a two-step process. Often, the original GTC order must first be canceled, then a new order with updated parameters submitted. An investor can also explicitly cancel a GTC order at any time before execution, removing it from the market. While “Good ‘Til Cancelled” implies indefinite duration, most brokerages set a maximum time limit for these orders, typically 30 to 90 calendar days, though some may extend up to 180 days. If an order is not filled within this period, it will be automatically canceled by the brokerage to prevent unintended executions.

Important Considerations for GTC Orders

Market conditions change, so a GTC order placed weeks or months ago might no longer align with current realities or an investor’s strategy. For example, significant market volatility can lead to rapid price movements, potentially causing a GTC order to execute at an unexpected or less favorable time if the price briefly touches the specified level. Regularly review active GTC orders to ensure they still reflect investment objectives.

Corporate actions, such as stock splits, mergers, or dividend distributions, can also impact the price of a security and may lead to the automatic cancellation of existing GTC orders by the brokerage. These events can alter the underlying value or structure of shares, requiring re-evaluation of standing orders. GTC orders, like all orders, compete in the market based on factors such as price and entry time, affecting execution priority.