What is Good-Till-Date (GTD) in the Stock Market?

GTD is a type of trade order; the term GTD stands for “good till date/day/time”; this means that this order is valid till a specified date or time unless it has been already fulfilled or cancelled.Most orders that are placed on the exchange are by default GTD orders which means they are valid till the end of a trading day or in other words the order will get cancelled automatically at the close of the trading day. GTD orders become operational when an order does not get executed owing to poor liquidity or unfavourable price conditions. GTD orders are used to cover more extended periods by long term investors who want trade in a large number of securities at a set price.

A GTD in the stock market can be useful for investors because instead of setting up the same order every day they can keep this order open until a date or time of their choice. They are condition-based orders which means that the order will be executed only if certain parameters which mostly relate to price are met. In case these parameters are not met then the order expires on the specified date or time as defined by the user.

We understood that GTD orders remain in the system until the end of the expiration date as defined by the trader. Apart from that here are a few features of GTD orders:● When setting up this order, the trader selects an expiration date and time until which the order will be operational. If only the date is entered the order will get cancelled at the end of the specified date if unfilled.● Gives the trader flexibility to choose more extended time frames in which the trade can be executed.● Investors can place orders at a specified price and quantity for stocks.● Eliminates the need to log in again and again or get in touch with dealing desks for placing limit orders.● Orders that are partially executed on different trading days are not combined, and commissions are charged on each order that is executed.A downside of GTD orders may be that the traders may forget their orders which may become unfavourable due to changing market conditions, thus leading them to unplanned losses.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.