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Highlights
- GTM orders remain valid until the last trading day of the current month.
- These orders provide traders with extended execution flexibility.
- They automatically expire if unexecuted by month-end.
A Good-this-Month (GTM) order is a type of trading instruction that remains active until the end of the current calendar month. If not executed within this timeframe, the order automatically expires. This mechanism allows traders to maintain an active position without needing to re-enter orders daily.
Understanding GTM Orders
A GTM order is particularly beneficial for traders and investors who wish to maintain an order for a prolonged period but do not want it to persist indefinitely. This order type eliminates the need for daily re-submission while ensuring that it does not carry over beyond the designated month.
Benefits of Using GTM Orders
- Extended Execution Window – Unlike day orders that expire at the close of each trading session, GTM orders remain open throughout the month, increasing the chances of execution.
- Convenience for Traders – Investors do not need to repeatedly enter the same order, reducing manual effort and potential errors.
- Controlled Expiry – GTM orders automatically expire at month-end, preventing unintended execution beyond the investor’s intended timeframe.
How GTM Orders Work
When placing a GTM order, traders specify their desired price and quantity. The order remains in effect until one of the following occurs:
- The order is executed before the end of the month.
- The month ends without execution, causing the order to expire automatically.
This feature makes GTM orders useful for investors who anticipate price movements within a specific monthly window but do not want an order to remain open indefinitely.
Differences Between GTM and Other Order Types
- GTC (Good-Till-Canceled) – Remains valid until manually canceled, whereas GTM orders expire at month-end.
- Day Orders – These expire at the end of the trading day unless executed, unlike GTM orders, which persist for the entire month.
- GTD (Good-Till-Date) – Allows setting a custom expiration date, while GTM orders always expire at the end of the month.
Use Cases for GTM Orders
- Investors expecting gradual price changes – Those who anticipate movement within a month can benefit from GTM orders without re-entering them daily.
- Portfolio managers with predefined trading strategies – Ensures orders remain valid within a specific timeframe without manual intervention.
- Traders avoiding indefinite open orders – Prevents unwanted long-term order persistence, aligning with short- to mid-term trading goals.
Conclusion
A Good-this-Month (GTM) order is a practical tool for traders who want to maintain an order throughout the current month without daily renewal. It balances convenience, flexibility, and controlled expiration, making it a valuable choice for strategic trading. By expiring automatically at the month’s end, GTM orders help investors manage their portfolios with precision and efficiency.
