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Welcome to OptionRally Academy, I'm Amy Anderson with the Term of the day.
Today we are going to talk about Good Til Canceled or GTC.
GTC is an effective order to either buy or sell until the transaction is terminated or
executed. Usually brokers allow a 30 to 60 day timeframe in which the order is effective,
after which the order will remain active or canceled.
In most cases, these kinds of orders are canceled by brokerage firms after 30 to 90 days. Orders
like these are traditionally placed at price points away from the price of the stock at
the time the order is placed.
If you hold a stock that is currently worth $40 but you think it will go to $50 at which
point you would sell, you are able to use a GTC order. Once the order to sell is placed,
when the price of the stock reaches $50 at any point over the upcoming months your shares
would be sold.
Thank you for joining me for the term of the day, join me for a new term every day.
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