GTT Order: The Ultimate Tool for Hands-Free Trading Success

In the world of trading and investing, understanding different types of orders is crucial for effective market participation, one such type is the GTT order. The GTT full form is Good Till Triggered. This article will look into the intricacies of what is GTT order, GTT order meaning, functionality, and advantages to traders.

What is GTT Order?

A GTT order meaning is a type of order that remains active in the market until it is either executed or cancelled by the trader. Unlike traditional orders that may expire at the end of the trading day, a GTT in share market can stay open longer, often until a specified price level is reached or until the trader decides to cancel it. This feature makes GTT orders particularly useful for traders with specific price targets in mind but may not actively monitor the market.

GTT Order Meaning

The GTT order meaning can be broken down into its components:

• Good Till Triggered: This indicates that the order will remain valid until a particular condition is met, typically when the market price reaches the level the trader sets.
• Order Type: GTT orders can be placed for various transactions, including buy and sell orders, making them versatile tools for traders.

How GTT Orders Work?

GTT (Good Till Triggered) orders are limit orders that remain active until a specific price condition is met. They’re a valuable tool for investors who want to automate their trading strategies and avoid the need for constant market monitoring.

The Mechanics of a GTT Order

1. Setting the Trigger Price: Specify a trigger price when placing a GTT order. This is the price at which you want the order to be activated.
2. Limit Price: You also set a limit price. This is the maximum price you’re willing to pay for a buy order or the minimum price you’re willing to accept for a sell order.
3. Activation: Once the market price reaches the trigger price, the GTT order is activated and becomes a regular limit order.
4. Execution: The order will be executed at the limit price or a better price if available. The order will be cancelled if the limit price is not reached by the end of the trading day.

Key Points to Remember

• Validity: GTT orders typically have a validity period, varying depending on the broker. If the order is not triggered within the specified period, it will be cancelled.
• Market Conditions: The order will only be executed if there is sufficient liquidity in the market at the trigger price and limit price.
• Trigger Price vs. Limit Price: The trigger price is the price that activates the order, while the limit price is the price at which the order will be executed.
• Types of GTT Orders: You can buy and sell GTT orders.

Examples of GTT Orders

• Stop-Loss Order: A stop-loss order is a sell GTT order used to limit losses. If the price of a security falls to a predetermined level (the trigger price), the order will be executed to sell the security.
• Take-Profit Order: A take-profit order is a sell GTT order used to lock in profits. If the price of a security rises to a predetermined level (the trigger price), the order will be executed to sell the security.
• Buy on Dip: A buy-on-dip order is a buy GTT order used to purchase a security at a lower price. If the price of a security falls to a predetermined level (the trigger price), the order will be executed to buy the security.

GTT Order Means in Practical Terms

In practical terms, a GTT order means traders can automate their trading strategies. For example, if a trader believes a stock will reach a specific price but does not want to watch the market continuously, they can set a GTT order at that price. If the stock reaches that price, the order will automatically execute, allowing the trader to capitalise on the opportunity without being present.

Advantages of GTT Orders

GTT orders offer several advantages for traders:

• Time-Saving: Traders do not need to monitor the market constantly, which can be particularly beneficial in volatile markets.
• Price Control: GTT orders allow traders to set specific price levels, ensuring they buy or sell at comfortable prices.
• Flexibility: Traders can use GTT orders for various assets, including stocks, commodities, and currencies, making them a versatile tool in any trading strategy.

Disadvantages of GTT Orders

While GTT orders have many benefits, they also come with some disadvantages:

• Market Changes: If the market conditions change significantly, the price set in a GTT order may become irrelevant, potentially leading to missed opportunities.
• Order Expiration: Depending on the brokerage platform, some GTT orders may expire, after which they will be automatically cancelled if not executed.

How to Place a GTT Order?

Placing a GTT order typically involves the following steps:

1. Log into Your Trading Account: Access your brokerage platform where you wish to place the order.
2. Select the Asset: Choose the asset (stock, commodity, etc.) you want to trade.
3. Choose Order Type: Select “GTT” as the order type.
4. Set Price Levels: Specify the price at which the order will be executed.
5. Review and Confirm: Double-check the details of your order and confirm to place it.

Conclusion

In summary, a GTT order is a powerful tool for traders looking to automate their trading strategies and manage their investments effectively. By understanding what is GTT order, what GTT order means and how it works, traders can take advantage of market opportunities without needing to constantly engage with the market.

For those interested in exploring GTT orders and other trading options, SMC Global Securities offers a comprehensive trading platform that can assist you in implementing your trading strategies effectively. With a focus on customer service and innovative trading solutions, SMC Global Securities is well-equipped to support your trading journey.

FAQs about GTT Orders

1. What is the difference between GTT and market orders?

A market order is executed immediately at the best available price. A GTT order meaning on the other hand, remains active until it is triggered by a specific price level. This allows for more control over the execution price.

2. Can I cancel a GTT order after placing it?

Yes, you can usually cancel a GTT order before it is triggered. However, once the trigger price is reached, the order cannot be cancelled.

3. How long is a GTT order valid?

The validity period of a GTT order depends on the brokerage platform. Some brokers allow you to set a specific expiration date, while others may have a default expiration time.

4. Can I place a GTT order for multiple assets at once?

Yes, many brokerage platforms allow you to place GTT orders for multiple assets simultaneously. This can be helpful for managing a diversified portfolio.

5. Are there any fees associated with using GTT order?

Fees for GTT order may vary depending on your brokerage platform. Some brokers may charge a flat fee per order, while others may charge a percentage of the transaction value. It’s important to check your broker’s fee schedule to understand the costs involved.

Author: All Content is verified by SMC Global Securities.