Good Till Cancelled (GTC)
Good Till Cancelled (GTC)
Time-in-force instruction that keeps an order active until executed or explicitly cancelled by the investor. GTC orders remain open across multiple trading sessions, unlike day orders that expire at market close. Broker-dealers typically impose time limits of 90 to 180 days, after which the order automatically expires. Must be manually cancelled if the investor no longer wants the order to execute.
An investor places a GTC limit order to buy 100 shares of ABC stock at $50 when the current price is $55. The order remains active day after day until ABC falls to $50 and executes, or until the investor cancels it. If neither happens within the broker's time limit (e.g., 90 days), the order automatically expires. This contrasts with a day order, which would expire at the end of the first trading session if not filled.
Students often think GTC orders last forever, but broker-dealers impose time limits (typically 90-180 days) after which orders automatically expire. Another common error is believing GTC orders guarantee execution (they do not: the order only executes if market conditions meet the specified price). Some confuse GTC with FOK (Fill-or-Kill) or IOC (Immediate-or-Cancel), which have much shorter timeframes. Remember that GTC is a time-in-force instruction, not an order type: you can have a GTC limit order, GTC stop order, etc.
How This Is Tested
- Identifying when a GTC order is appropriate based on investor time horizon and price targets
- Understanding the difference between GTC (multiple days) and day orders (single session)
- Recognizing that GTC orders do not guarantee execution, only extended active time
- Determining what happens to unexecuted GTC orders after broker time limits expire
- Distinguishing GTC from other time-in-force instructions like IOC or FOK
Regulatory Limits
| Description | Limit | Notes |
|---|---|---|
| Typical broker GTC time limit | 90 to 180 days | Varies by broker-dealer; order expires automatically if not executed or cancelled |
Example Exam Questions
Test your understanding with these practice questions. Select an answer to see the explanation.
Margaret, a long-term investor, owns a diversified portfolio and has been watching XYZ stock for months. The stock currently trades at $82, but Margaret believes it is overvalued and only wants to buy if it drops to $70 or lower. She is willing to wait several weeks or months for this price target. Which order type and time-in-force instruction would be most appropriate?
B is correct. A limit order at $70 with GTC (Good Till Cancelled) instruction is most appropriate because: (1) the limit order ensures Margaret only buys at $70 or better, (2) the GTC instruction keeps the order active across multiple trading sessions until her price target is met or she cancels it, and (3) she has explicitly stated willingness to wait weeks or months, making GTC ideal.
A is inappropriate because a market order would execute immediately at the current price ($82), not her target ($70), and the day instruction would expire at market close if unfilled. C is incorrect because a stop order at $70 would trigger a sell (not buy) if the price fell to $70, and FOK requires immediate execution or cancellation (not extended waiting). D is incorrect because the limit at $82 is the current market price (she wants $70), and IOC requires immediate execution or cancellation within seconds, not weeks/months of waiting.
The Series 65 exam tests your understanding of how time-in-force instructions align with client objectives and time horizons. GTC orders are appropriate for patient investors with specific price targets who can wait for market conditions to meet their criteria. Understanding when to recommend GTC versus day, FOK, or IOC instructions is critical for suitability analysis.
What is the primary characteristic of a Good Till Cancelled (GTC) order?
C is correct. GTC orders remain active across multiple trading sessions (days, weeks, or months) until one of three things happens: (1) the order executes when market conditions meet the specified price, (2) the investor explicitly cancels the order, or (3) the broker-dealer's time limit (typically 90-180 days) expires and the order is automatically cancelled.
A is incorrect because GTC orders do NOT last indefinitely; broker-dealers impose time limits (usually 90-180 days) after which orders automatically expire. B describes a day order, not a GTC order. Day orders expire at the end of the trading session if not filled. D describes a Fill-or-Kill (FOK) order, which requires immediate complete execution or cancellation, not the extended timeframe of GTC.
The Series 65 exam frequently tests the distinction between time-in-force instructions. You must understand that GTC extends the order lifespan across multiple sessions but does NOT last forever due to broker time limits. This knowledge is essential for explaining order execution mechanics to clients and managing expectations about order duration.
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Access Free BetaAn investor placed a GTC limit order to sell 200 shares of DEF stock at $95 on February 1st. The stock is currently trading at $88. The investor's broker-dealer has a 90-day GTC policy. If the stock never reaches $95 and the investor does not cancel the order, when will the order expire?
C is correct. With a 90-day GTC policy, the order will automatically expire 90 days after February 1st, which is May 2nd (February 1 + 90 days = May 2). If the stock never reaches $95 during this period and the investor does not manually cancel the order, it will be automatically removed from the order book on May 2nd.
A describes a day order, which expires at market close on the same trading day. GTC orders remain active for multiple sessions, not just one day. B incorrectly uses a 30-day timeframe, but the broker's policy is 90 days. D is incorrect because GTC orders do NOT last indefinitely; broker time limits (in this case 90 days) cause automatic expiration to prevent stale orders from remaining in the system indefinitely.
The Series 65 exam tests your understanding of broker-dealer policies and automatic expiration rules. While GTC orders extend beyond single trading sessions, they have finite lifespans due to broker time limits. Advisers must inform clients about these limits and the need to renew orders if price targets are not met within the specified timeframe.
All of the following statements about Good Till Cancelled (GTC) orders are accurate EXCEPT
B is correct (the EXCEPT answer). This statement is FALSE. GTC orders do NOT guarantee execution. They only keep the order active for an extended period (until executed, cancelled, or the broker time limit expires). Execution only occurs if market conditions meet the order specifications. A limit order to buy at $50 will NOT execute if the stock never falls to $50, even with GTC instruction.
A is accurate: the defining characteristic of GTC is multi-session duration, unlike day orders that expire at market close. C is accurate: broker-dealers impose time limits (typically 90-180 days) to prevent stale orders from remaining indefinitely in the order book. D is accurate: GTC orders remain active until one of three events: execution, manual cancellation, or automatic expiration after the broker time limit.
The Series 65 exam tests the critical distinction between order duration and execution guarantee. GTC extends the timeframe but does NOT guarantee execution. This is essential for managing client expectations: a GTC order can remain unfilled indefinitely if market conditions never meet the specified price, and will eventually expire due to broker time limits.
An investor places a GTC limit order to buy 500 shares of MNO stock at $40 when the current market price is $45. Which of the following statements about this order are accurate?
1. The order will execute immediately at $45
2. The order will remain active until MNO falls to $40, the investor cancels it, or the broker time limit expires
3. The order will automatically execute at any price below $40
4. The order could remain unexecuted for weeks or months if MNO never reaches $40
D is correct. Statements 2, 3, and 4 are accurate.
Statement 1 is FALSE: The order will NOT execute immediately because it is a limit order at $40, and the current market price is $45. Limit orders only execute at the specified price or better. Since this is a buy order at $40, it will only execute when MNO falls to $40 or lower.
Statement 2 is TRUE: This accurately describes GTC mechanics. The order remains active across multiple trading sessions until: (a) MNO falls to $40 and the order executes, (b) the investor manually cancels it, or (c) the broker-dealer's time limit (e.g., 90 days) expires.
Statement 3 is TRUE: Since this is a limit order to buy at $40, it will execute at $40 or ANY BETTER price (lower than $40). If MNO falls to $38, the order will execute at $38 (better for the buyer than $40). Limit orders set the maximum buy price or minimum sell price.
Statement 4 is TRUE: If MNO never falls to $40 during the broker's GTC time limit, the order will remain unexecuted for the entire duration (potentially weeks or months) and then automatically expire.
The Series 65 exam tests your understanding of how time-in-force instructions (GTC) interact with order types (limit orders). You must understand that: (1) GTC extends duration but does not guarantee execution, (2) limit orders execute at the specified price or better, and (3) orders can remain unfilled for extended periods if market conditions do not meet the price specification. This is critical for advising clients on realistic execution expectations.
💡 Memory Aid
GTC = "Goes Till Cancelled" (or broker time limit). Unlike day orders that die at market close, GTC orders keep working across multiple sessions (typically 90-180 days). Think of it as setting a price trap that waits patiently until the market meets your target or you give up and cancel it. Key: Time extension, NOT execution guarantee.
Related Concepts
This term is part of this cluster:
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Where This Appears on the Exam
This term is tested in the following Series 65 exam topics: