By Gianluca Longinotti
Reviewed by Leav Graves
Table of Contents
A GTD order, or Good-Till-Date order, is a straightforward trading tool that can simplify stock or options strategies. But what is GTD in trading, and what does GTD mean in trading? This article breaks down the GTD stock meaning and explains when it might fit into your trading approach.
Key takeaways
- A GTD order is a limit or stop order that expires at the end of the day selected by the user, if not executed.
- Unlike Good-Till-Cancelled (GTC) orders, GTD orders do not remain open indefinitely, reducing the risk of unwanted executions in future sessions.
What Is a Good-Till-Date (GTD) Order?
A GTD order, or Good-Till-Date order, is a type of limit or stop order that expires automatically at the end of the trading date selected by the user if it’s not executed. For example:
- On Monday, a trader sets a sell stop order on MSFT stock at $400 one week before an earnings release (happening on Friday), selecting a 5-day window.
- If the stock price falls to $400, the order executes.
- If it doesn’t, the order cancels when the 5-day window expires.
This makes GTD orders useful for managing trades without constant monitoring. Of course, most brokers let you choose the day in which your order will expire. For instance, you could set a GTD order for the next 3 days instead of just one.
Why Use a GTD Order?
So, why would you want to use a GTD order when trading options – perhaps through our screener for the options market – or other assets? Let’s see this in detail in the table below:
Reason to Use a GTD Order | Description |
|---|---|
Short-Term Trading Strategy | GTD orders help capture daily price swings by setting specific entry and exit prices that expire on the day selected by the user. |
Managing Risk Without Monitoring | Use a GTD stop-loss order to limit potential losses, especially after major news, while staying hands-free. |
Avoiding Order Conflicts | GTD orders expire when the users choose to set the expiration. This trick eliminates the need to cancel old orders for quick market trades. |
These features make GTD orders practical for managing trades in a precise and low-effort way, especially when timing is key.
When to Use a GTD Order? (When Is GTD in Trading Most Useful?)
Many traders ask, when is GTD in trading most useful? The answer depends on your strategy, but here are some key situations where a GTD order can be beneficial. Here are a few thoughts on this:
- Trading Around Events: GTD orders work well for setting stop or limit orders ahead of earnings reports or big news. If your target price is hit, the order executes; if not, it cancels.
- Capturing Daily Price Swings: Traders use GTD limit orders to catch short-term price spikes, avoiding the hassle of unfilled orders sitting overnight.
Since we don’t like opening a trade position on Fridays, something we sometimes do is set a GTD order on Monday at the desired price on an option and set its duration to four days, so that we either a) enter the position at the desired price by Thursday or b) if we are not filled by Thursday’s end, the order cancels itself. This is just an example of course, GTD orders are an easy system you can use to build more complex strategies.