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Key Highlights
- The full form of GTT order is good till triggered.
- GTT orders allow traders to automate their trades based on predetermined requirements.
- There are two types of GTT orders: Single Order GTT and One Cancels Other GTT.
- One of the major benefits of GTT orders is the fact that you will never have to track your trades as they are automated.
As you venture into the investing world, learning about GTT becomes essential. During your investment journey, you will want to buy and sell your holdings at predetermined prices.However, continuously tracking the price of each stock that you are interested in will become a significant problem.Because of how fast the stock market moves, you may miss out on your desired price to make a transaction. This is where GTT (Good Till Triggered) orders come in. In this blog, we will be finding out GTT orders' meaning and how GTT orders benefit traders.A complete understanding of GTT orders will help you improve the efficiency and speed at which you trade.
What is GTT Order in Share Market?
GTT orders are trade orders based on certain conditions set by the trader. These orders remain active (usually for a year), till the condition is met.Usually, the underlying condition for GTT orders is a price point for a particular share. If the stock reaches the specified price, the order will be executed.
Types of GTT Orders
After learning about GTT orders, you can explore the various types that can be executed. Here are the types of GTT orders that can be implemented:
- Single Trigger GTT: This is a simple GTT order. If you have placed this order, a limit order will be placed if a share price reaches your desired price and quantity. By using this GTT order, you can specify at which price you can enter and exit a trade.
- OCO (One Cancels Other) : This type of GTT order allows you to set two trigger prices. One of the trigger prices will be for a buy order and another one will be for a sell order. By using OCO GTT orders you can book profits at set prices and eliminate significant losses.
GTT Orders Benefits
Now that you are aware of how the GTT order works, we will look at the several advantages of using GTT orders. Here are the various ways in which GTT orders can be helpful to you as a trader:
- Efficiency: Through GTT orders, you can remove the need to continuously track the price of each share that you are planning to buy or sell. Using GTT orders can help you become a more efficient trader.
- Risk Management: You can add stop-losses and take-profit levels on your GTT orders. By adding these elements to your order, the risk management of your investments becomes significantly better.
- Customisation: Good Till Triggered (GTT) orders offer a high degree of flexibility in trading. They allow you to set various order types, including limit, market, and stop orders, and customise the specific triggers that initiate execution.
Setting Up GTT Orders: Step-by-Step Process
Equipped with all this information, you are now ready to execute your GTT order. Here's how to implement GTT Orders effectively:
- Step 1: Select the stock or security.
- Step 2: Choose the GTT order type.
- Step 3: Set trigger prices.
- Step 4: Specify quantity.
- Step 5: Review and confirm.
- Step 6: Monitor the order status.
Everything You Need To Know About GTT Orders
GTT orders are powerful tools for systematic and disciplined trading. Understanding what is GTT order and how to use it effectively can significantly enhance your trading strategy. Whether you're a busy professional or an active trader, the GTT feature order provides valuable automation and risk management capabilities.Remember, while GTT orders offer many benefits, they should be used as part of a comprehensive trading strategy, not as a standalone solution. Also Read: What is Good 'Til Canceled – GTC?
FAQS - FREQUENTLY ASKED QUESTIONS
What is the GTT order's main advantage?
GTT orders' main advantage is automated trade execution based on pre-set conditions without daily renewal.
How long do GTT orders remain active?
GTT orders remain active until either triggered or cancelled by the user.
Can I modify GTT orders after placing them?
Yes, you can modify or cancel GTT orders at any time before they are triggered.
Are GTT orders executed outside market hours?
No, GTT orders are only executed during regular market hours.
Can I set multiple GTT orders for the same stock?
Yes, you can set multiple GTT orders with different conditions for the same stock.
Do GTT orders guarantee execution?
No, execution depends on market conditions and the availability of shares at the trigger price.
How do GTT orders differ from regular stop-loss orders?
GTT orders remain valid until triggered or cancelled, while regular stop-loss orders expire daily.
Is there a limit to the number of GTT orders I can place?
Yes, limits may vary by broker, so check with your trading platform for specific restrictions.
Are GTT orders executed outside market hours?
No, GTT orders are only executed during regular market hours.
How do GTT orders differ from regular stop-loss orders?
GTT orders remain valid until triggered or cancelled, while regular stop-loss orders expire daily.
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.
