What is a GTC Order? Good Til Canceled Explained

When you place a stock order, you need to decide how long it should stay active. A GTC (Good Til Canceled) order remains open until it fills or you manually cancel it. This makes it perfect for patient traders who want to wait for their target price. Let us explore how GTC orders work and when to use them.

What is a GTC Order?

GTC stands for "Good Til Canceled." It is not an order type like market or limit. Instead, it is an order duration that tells your broker how long to keep your order active. A GTC order stays on the books until one of three things happens:

• The order fills (you get your trade)
• You manually cancel the order
• The broker's maximum time limit is reached (typically 60-180 days)

How GTC Orders Work

Here is the typical process:

• You place a limit order to buy a stock at $95 (currently at $100)
• You select "GTC" as the duration
• Your order sits and waits across multiple trading days
• Three weeks later, the stock dips to $95
• Your order automatically fills at $95

Without GTC, you would need to manually place a new order every single day, hoping the stock reaches your price during that session.

GTC vs Day Orders

The main alternative to GTC is a "Day Order," which expires at the end of the trading day if not filled.

Advantages of GTC Orders

1. Set It and Forget It

Place your order once and let the market come to you. No need to remember to re-enter orders daily or watch screens constantly.

2. Catch Price Targets

Stocks often hit key levels briefly. A GTC order ensures you get filled even if the price touches your level for just moments while you are away.

3. Remove Daily Decision Making

With a GTC order in place, you have made your decision. No second-guessing every day whether to place the order again.

4. Works Across Time Zones

If you cannot trade during market hours, GTC orders execute automatically when your price is hit.

5. Patient Entry and Exit

Waiting for a specific price becomes effortless. You can target pullbacks or breakouts without constant monitoring.

Disadvantages of GTC Orders

1. Forgotten Orders

The biggest risk is forgetting about a GTC order. Weeks or months later, it might fill at a time when your analysis has changed or you no longer want the trade.

2. Changed Market Conditions

What seemed like a good price weeks ago might not be appropriate anymore. News, earnings, and market shifts can make old orders obsolete.

3. Broker Time Limits

GTC does not truly mean forever. Most brokers cancel GTC orders after 60-180 days. You need to re-enter if still interested.

4. Multiple Partial Fills

If your order fills in pieces over several days, you might end up with multiple small transactions and potential commission costs (depending on your broker).

When to Use GTC Orders

• Buying pullbacks: Set a limit below current price and wait for dips
• Profit targets: Set a sell limit at your target and let it work
• Long-term investing: Accumulate shares at specific prices over time
• Busy schedule: Cannot monitor markets daily
• Specific technical levels: Target support, resistance, or moving averages

When to Use Day Orders Instead

• Day trading: Positions should not carry overnight anyway
• Rapidly changing situations: When analysis changes daily
• News-driven trades: The opportunity is time-sensitive
• High volatility: Prices swing too much to leave orders open

GTC Order Best Practices

• Review regularly: Check your open GTC orders at least weekly
• Keep a list: Track all your outstanding orders in a spreadsheet or app
• Set calendar reminders: Remind yourself to review and update orders
• Cancel outdated orders: If your thesis changes, cancel the order immediately
• Know your broker's limit: Understand when GTC orders automatically expire
• Use alerts: Set price alerts as backup to your GTC orders

GTC Orders with Different Order Types

GTC is a duration, not an order type. You can combine it with various order types:

• GTC Limit Order: Most common. Buy or sell at a specific price, stays active until filled.
• GTC Stop Loss: Protection order that stays active. Good for longer-term holdings.
• GTC Stop Limit: Stop loss with price control that remains active.

Note: Market orders are typically day-only since they execute immediately.

Managing Multiple GTC Orders

Active traders often have several GTC orders working simultaneously. Best practices include:

• Use your broker's "open orders" page to see all active GTC orders
• Check this page before entering new trades to avoid duplicate positions
• Review after significant market moves or news events
• Cancel orders on stocks you no longer want to trade

Summary

GTC (Good Til Canceled) orders stay active until filled or canceled, spanning multiple trading days. They are perfect for patient traders who want to enter or exit at specific prices without daily order management. The main risk is forgetting about old orders that fill when conditions have changed. Always review your open GTC orders regularly and cancel any that no longer fit your trading plan.

Learn about other order durations like day orders, or explore time-sensitive options like fill or kill orders.