When you place an order, you must give it an expiration date. Day orders are good until the end of the trading day, at which point they are cancelled; all market orders are placed as day orders.
Good-till-Cancelled (GTC) orders, however, remain open until one of three things occurs:
1. They are completely filled
2. You cancel the order
3. Sixty calendar days pass
There risks in using Good-till-Cancelled orders:
· You may forget you placed the order; a lot can change in 60 days!
· If you place a large trade with Good-till-Cancelled status, you will pay a commission each day your order is partially filled. If, on the other hand, your order is filled by multiple transactions in a single day, your broker should only charge you a single commission.
Extended Hours Orders
The extended hours market allows you to place trades between 8 p.m. and 8 a.m.; times when the market is traditionally closed. This system permits investors to react to corporate announcements and news prior to the next session.
There are a number of risks associated with extended hours orders; primarily an increase in volatility as a result of decreased liquidity. Any time there are fewer shares trading hands, stock price movements larger because buy and sell orders have a disproportional influence upon the quoted value. As a result, the price you pay for an extended hours trade can differ substantially from what you would pay (or receive) during regular market hours.
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