For buy and sell orders, you as a trader have the possibility to specify some order additions, which allow you to customize the order according to your needs. As for the term of an order (Order validity), in addition to the so-called Day Order (valid until the end of the day) and the IOC Order (Immediate Or Cancel Order), the GTC Order (Good Til Cancelled Order) is often used. This article explains what a GTC order is and what to look out for.
What is a GTC Order?
A GTC order (Good Til Cancelled Order) remains active until the order is executed or cancelled by the trader. Thus, it is possible to place an order several days or weeks before a certain price level is reached, which will then be executed automatically. The GTC validity period is therefore particularly suitable for limit orders and stop orders.
Expiration date of a GTC order
As just described, the purpose of a Good Til Cancelled order is that it does not expire and can remain "in the market" for a long time. Nevertheless, the order validity is not infinite, but limited in time. This is mainly for security purposes.
- A GTC order expires at the end of the calendar quarter following the current quarter. For example, if you place a GTC order in the first week of January, it will expire at the end of the second quarter, i.e. no later than June 30.
- Also, with CapTrader, a GTC order expires if you do not log into your account for 90 days.
There are a few other ways in which a GTC order can be cancelled early:
- In the event of a corporate action resulting in a stock split, reverse stock split, share exchange or share issue.
- A dividend payment which exceeds the proportion of 3 % of the previous day's closing price.