Order Options: Day vs. GTC
When you execute a limit or stop order, you can specify one of two options: Day or GTC (good till cancelled). A day order is only valid for the rest of that trading day, while GTC indicates that the order can be carried over into the next trading day and may remain in effect until one of two things occurs: (a) the stock reaches the specified threshold; (b) the investor decides to cancel the order. Be sure to check with your broker about these options: some of them limit the number of days that the GTC option can be in effect.
Order Options: All or None
Another condition you can set on a buy or sell order is AON: the command to fill the order completely or not at all. In other words, the broker must buy all the shares at the price you specify, or cancel the order altogether.
Let’s say you place an AON order for 100 shares of stock XYZ at $9 apiece. If the broker can find 100 shares that fit the bill, well and good. If not, the order is canceled at the close of trading, and the investor must re-submit it the next day. With an AON order, the investor never receives an order that is half-filled—hence the name. In a standard limit order, by contrast, the broker might buy 60 shares at $9, watch the stock gap up, and then have to wait till it dips back down to $9 to fill the rest of the order.
Order Options: Fill or Kill
This option instructs a broker to fill an order entirely and immediately or not at all. Its purpose is to guarantee that the investor picks up a stock at the desired price, and it is usually used when buying a large quantity of stock. In practice, this type of trade doesn’t happen very often. Much more common is the good-till-canceled option discussed above.
One piece of closing advice: if you’re a long-term investor, don’t worry too much about paying a price that’s a little bit off target. There are day traders who fight over every last penny, but this is madness. The market is too fast-moving to allow for that kind of precision. Consider that a stock like Bank of America can average 10,000 shares traded every second over the course the entire 6.5-hour trading day. It’s much better, if you’re in it for the long haul, to do your homework, set your orders, and then sit back and watch your portfolio grow.