Ever place an order with a friend going to the donut shop for a coffee and a raspberry jelly donut, but to get an apple jelly donut if the shop has run out of raspberry? Last thing you want is the coffee without the donut.
A Day-Around Order is a similar kind of securities order. It gives a contingency in order to get an execution done, since orders have to be followed explicitly by law, and a previous order must be cancelled before a new order replaces it. If, say you wished to buy 100 shares of a stock with a limit order of $5, but news comes out before the open, and that stock opens at $5.50 and starts to climb, you could put a Day-Around-Order that adds a $5.65 limit for the 100 shares. This allows for the cancelation for compliance purposes, and the execution to be completed so you still get your shares.
A market order could work to get you executed, but then you would automatically get filled if the stock opened perhaps at $6, which might be higher than your acceptable entry point.
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Finance: What is Good 'Til Canceled (GTC...2 Views
Finance a la shmoop what is good til' cancelled or GTC? well it's a way in
which securities buy and sell orders are placed like i'll buy 10,000 shares of
coke at $42 a share and this order is GTC ie it's good or effective or living [Man holding stocks of coca cola]
until I tell you otherwise or cancel it got it could this order sit on the books
of a brokerage at Goldman or Morgan or Fidelity or another broker for 8 months
before executing sure sure it could if it isn't cancelled then it's effective
and it sits around waiting for that shoulder tap to finally get on the stock [Person taps on a mans shoulder]
conveyor belt and get on getting on being sold and that's it good til'
cancel just think Futurama it was good real good until it was cancelled and now [Man watching futurama]
it exists only in the pasturama...
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