In finance, a Good-Til-Canceled (GTC) order is an order to buy or sell a security at a set price, the order is open until it is either completed or cancelled.
Good-Til-Canceled orders continue to be open until the set parameters are met. A normal trade would cancel the trade when the market closes. However, with a GTC an investor does not have to open a new trading position the following day.
With a GTC order instruction a brokerage company will hold the order for an set period of time – which is usually not more than 90 days. Note that this time frame can vary from broker to broker.
A GTC order is normally placed at a different price point from the price of the security (being bought or sold) at the time the order was carried out.
For example, if a trader has a stock worth $20 per share and wants to sell the security if it becomes worth $25, then by opening a GTC order it will allow them to have an open position to sell at $25 when that parameter is met – unless the investor cancels the order.
Good-Til-Canceled orders are a useful way of managing multiple securities in a portfolio, especially when daily management is not possible.
According to the US Securities and Exchange Commission, a Good-Til-Canceled Order is:
“An order to buy or sell a stock that lasts until the order is completed or cancelled. Brokerage firms typically limit the length of time an investor can leave a GTC order open. This time frame may vary from broker to broker.”
Video – What is a GTC order?