When placing trades, one of the most important decisions is how long your order should remain active. Day orders are the default setting at most brokers and the most commonly used order duration. In this guide, we will explain what day orders are, how they work, and when to use them.
What is a Day Order?
A day order is an instruction to buy or sell a stock that expires at the end of the current trading day if it has not been filled. If the order does not execute during regular market hours, it is automatically canceled when the market closes.
The simple version: A day order says "Try to fill this order today. If it does not fill by market close, cancel it automatically." Tomorrow is a fresh start, and you would need to place a new order if you still want to trade.
How Day Orders Work
Here is the step-by-step process:
- You place an order with the day order time in force (usually the default setting)
- The order is active during regular market hours (9:30 AM - 4:00 PM ET)
- If your price is reached during the day, the order executes
- If the market closes without filling your order, it is automatically canceled
- The next trading day, you start fresh with no pending orders from yesterday
Day Order Examples
Example: Day Order That Fills
You want to buy 100 shares of Tesla at $240 when it is currently trading at $245.
- 9:30 AM: You place a day buy limit order for 100 shares at $240
- 11:00 AM: Tesla drops to $240, your order fills
Result: You successfully bought 100 shares at $240 per share.
Example: Day Order That Expires
You want to buy 100 shares of Tesla at $240 when it is currently trading at $245.
- 9:30 AM: You place a day buy limit order for 100 shares at $240
- All day: Tesla stays above $242, never reaching your $240 price
- 4:00 PM: Market closes, your unfilled order is canceled
Result: You did not buy any shares. The order no longer exists. If you still want to buy at $240 tomorrow, you need to place a new order.
When to Use Day Orders
Day orders are appropriate in these situations:
- Day trading: When you only want positions that can be established today
- Short-term opportunities: When the trade setup is only valid for today
- Active monitoring: When you plan to watch the market and can re-enter orders tomorrow if needed
- News-related trades: When you want to trade based on today's news only
- Default trading: For most routine trades where you will reassess tomorrow anyway
- Avoiding stale orders: When you want to start fresh each day with updated analysis
Advantages of Day Orders
- Clean slate each day: No forgotten orders from weeks ago surprising you
- Fresh analysis: Forces you to reassess trades daily based on current conditions
- Control: Orders will not fill based on old analysis that may no longer be valid
- No overnight risk: Limit orders will not fill on overnight gaps
- Simplicity: Easy to manage since open orders reset each day
- Default setting: Most brokers use day orders as the default, reducing mistakes
Disadvantages of Day Orders
Day orders have some drawbacks to consider:
- Requires daily attention: Must re-enter orders each day if they expire unfilled
- Missed opportunities: Your order might have filled the next day if it had stayed active
- More work: Repetitive order entry if you want the same trade for multiple days
- Gap fills missed: If a stock gaps down to your buy price overnight, your day order was not active to capture it
Tip: If you want an order to stay active for multiple days, use a good til canceled (GTC) order instead of a day order.
Day Order vs GTC Order
The primary difference is the duration:
- Day Order: Expires at market close if not filled (one trading day)
- GTC Order: Remains active until filled or canceled (typically 60-90 days)
Which Should You Choose?
Use a day order when:
- You only want the trade if it happens today
- Your analysis might change overnight
- You want to review and adjust your strategy daily
Use a GTC order when:
- You are willing to wait days or weeks for your price
- Your thesis is valid regardless of when it fills
- You do not want to re-enter the order every day
Day Orders and Extended Hours Trading
Understanding when day orders are active:
- Standard day orders are only active during regular market hours (9:30 AM - 4:00 PM ET)
- They will not fill during pre-market (4:00 AM - 9:30 AM) or after-hours (4:00 PM - 8:00 PM) sessions
- Some brokers offer extended hours day orders that are active during pre-market and after-hours
- If you want to trade in extended hours, check your broker's specific options
Day Orders with Different Price Types
Day orders can be combined with any price type:
- Day market order: Execute immediately at current price, typically fills instantly so expiration rarely matters
- Day limit order: Execute at specified price or better today, cancels at close if unfilled
- Day stop order: Triggers if price reaches stop level today, cancels at close if not triggered
- Day stop-limit order: Triggers and limits if conditions are met today, cancels at close otherwise
Common Day Order Mistakes
- Forgetting to re-enter: Your order expired yesterday, but you forgot to place it again today
- Assuming it is still active: Checking your orders the next day and being surprised it is gone
- Placing too early: Placing a day order before market open might fill at unexpected prices at the open
- Wrong duration selected: Accidentally choosing day instead of GTC (or vice versa)
Tips for Using Day Orders
- Check order duration: Always verify whether you selected day or GTC before submitting
- Set reminders: If your order expires unfilled, remind yourself to reassess tomorrow
- Use for active trading: Day orders work best when you are actively managing your positions
- Review at market open: Each morning, decide if yesterday's unfilled orders still make sense
- Know your broker's defaults: Understand whether your broker defaults to day or GTC orders
Track Your Daily Trading Activity
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Summary
Day orders are the most common order duration, expiring at the end of the trading day if not filled. They give you a clean slate each morning and prevent old orders from filling unexpectedly. Use day orders when your trade thesis is time-sensitive or when you want to reassess your strategy daily. For trades you are willing to wait on, consider using GTC orders instead.
Want to learn about other order durations? Check out our guide on good til canceled orders or learn about immediate or cancel orders.