When it comes to trading on the stock market, there are many different strategies and techniques you can use. One of the most popular methods is known as GTT orders, or Good-Til-Cancelled orders.
GTT orders are an automated way to buy or sell securities, and are often used by traders who are looking for flexibility and convenience in their trades. In this blog post, we will be exploring everything you need to know about GTT orders, including what they are, how they work, How they can benefit you and much more.
What are GTT orders?
GTT orders (also known as Good ‘Till Cancelled orders) are a type of limit order that can remain active in the market until they are either filled or cancelled. GTT orders are usually used when you want to buy or sell a certain security at a certain price, but you don’t want to have to constantly monitor the market and manually enter new orders.
What are the Types of GTT orders?
When placing a GTT order, an investor can choose either a single order or an OCO (one-cancels-other) order.
- Single: A single GTT order is simply an order to buy or sell at a certain price that remains open until the specified time expires.
- OCO: An OCO GTT order is two orders with the same expiration time. When one order is filled, the other is automatically canceled. This type of order is useful for creating contingent trades with different entry and exit prices.
What are the benefits of using GTT orders?
GTT orders are an increasingly popular trading tool among investors. GTT orders provide the ability to place orders that remain open until the investor manually cancels them or until the order is filled. This type of order provides several advantages that make it a great tool for long-term investors.
- Maintain control: GTT orders allows investors to maintain control over their trading activities. With this type of order, investors can establish buy and sell limits without worrying about them expiring before they are filled. This means that investors can set their own price targets and only accept trades when those targets are met.
- Flexibility: GTT orders gives investors more flexibility in terms of timing their trades. Since GTT orders remain open until they are either filled or cancelled, investors can wait for the right market conditions before executing their orders.
- Protection: GTT orders help protect investors from market volatility. When markets move quickly, having an open order can prevent investors from being stuck with a bad trade.
- Minimize transaction cost: GTT orders can help minimize transaction costs. With this type of order, traders can set their own price targets and then wait for the right market conditions before entering into a trade. This helps reduce transaction costs and allows traders to be more efficient in their trading decisions.
By taking advantage of these benefits, investors can benefit from improved profits and reduced risks when investing in the markets.
For which instances it can be used
GTT orders can be used to set up a trade that will remain active until either the desired conditions are met or the order is cancelled. These orders are commonly used by traders who want to ensure they get the best possible price on their trades without having to constantly monitor the market.
They can also be used in a wide variety of markets, including stocks, commodities, currencies, and other financial instruments. In most cases, these orders can be used for both buy and sell trades, and they can also be used for limit orders and stop loss orders.
GTT orders can be especially useful when trading with large amounts of capital, as they allow you to set up trades that will remain active for long periods of time without needing to be constantly monitored. This means you can focus on other aspects of your trading strategy while still making sure you don’t miss out on any potential opportunities.
Overall, GTT orders are a great way to ensure you get the best possible price on your trades and reduce the amount of time spent monitoring the markets. They are available in many markets and can be used for both buy and sell orders.
How to place a GTT order on mStock
Placing a GTT order on mStock is easy and straightforward. Here are quick steps to help you get started:
- Log into your mStock account and click ‘Trading’.
- Select the stock you want to buy or sell.
- Select the order type from the drop-down menu. Choose ‘GTT’ from the list of available order types.
- Enter the price you want to buy or sell your stock at and the number of shares you want to purchase or sell.
- Enter the duration for which your order will remain active. Your order will expire after the specified time period.
- Click ‘Place Order’ to submit your GTT order.
That is all there is to it. A GTT order ensures that your stock will be bought or sold at the specified price or better.
Is GTT orders applicable on all stocks?
GTT orders apply to most stocks, though they may only be available on some exchanges.
GTT orders are handy for traders looking for specific prices or types of stocks over an extended period. The orders can remain active for up to 60 days and will continue to search the market for opportunities to buy or sell at the predetermined price. However, if the stock reaches that price during the 60-day window, the order will automatically expire and no longer be active.
It is important to note that some exchanges may not offer GTT orders, and other exchanges may restrict the type of stocks that can be bought and sold with GTT orders.
If you are considering using GTT orders, it is crucial to understand the rules and regulations that apply to the particular exchange you are using before placing an order.
In conclusion, GTT orders can be an extremely powerful tool when used correctly. They allow traders to quickly execute large amounts of shares with minimal slippage, giving them an edge in volatile markets. The ability to set the order price and time can also be useful for reducing risk. However, these orders do come with some risk, such as the potential for a partial or complete fill due to the nature of the order type. Before deciding whether or not to use GTT orders, it is important to understand their advantages and disadvantages and assess how they could fit into your trading strategy.