Stake Academy AUS: Good-til-cancelled (GTC)
When you find a company to invest in, the price you have in mind isn't always the current price. The same goes for selling a stock. Getting the right price can be a waiting game, and good-til-cancelled (GTC) orders allow you that time without requiring you to keep an eye on the markets.
On the equity markets, there are two main order types: market and good-til-cancelled (GTC). A market order is the most straightforward. An investor places a buy or sell order for a specific number of shares, but no price. The trading platform will fulfil the order at the market price at that moment. With fast-moving markets or heavily traded securities, there could be a difference between the price you were quoted and the final transaction value. Plus, if there’s a specific price you want, you might have to monitor the markets until the timing is right. If you place a market order and it’s still not executed by the end of that trading day, it expires.
Name Your Price And Wait
On the other hand, GTC orders allow you to specify a target price. This sets a minimum price (for a sell order) or a maximum price (for a buy order) that you’ll accept to fulfil the transaction. These are also respectively known as a floor or ceiling.
A GTC order stays active until the price requirements are met – or until you cancel it, hence the name. On the Stake platform, if neither of those things happen in 30 days, that’s when your GTC order will expire.
GTC orders allow you to automate your price-sensitive trades, which can be extra handy for overseas markets like Wall St, given the difference in time zones. But they also help you stick to your strategy, as you decide your buy or sell price rationally, and remove heat-of-the-moment decisions from your trading.
Comparing Your Order Options
|Market Order||Good-til-cancelled (GTC) order|
|Time limit||End of Day (EoD)||30 Days|
|Determine shares transacted||Yes||Yes|
|Determine share price||No||Yes|
|The transaction value might be different from the order quote||Yes||No|