Day Order

A day order is an order that is valid for one particular trading day only, so its validity is limited from the outset. If the order has not been executed by the end of the specified trading day, it loses its validity and expires automatically.

How it works

When placing an order, traders usually choose how long it should remain valid. A day order applies only until the end of the current trading day, whereas a "good till cancelled" (GTC) order stays in the market until it is executed or cancelled by the trader; other variants are valid until a specific date. Validity mainly matters for pending orders such as limit and stop orders, since a market order is normally executed immediately anyway.

Example: a share is trading at $52. A trader places a buy limit order at $50 as a day order. If the price falls to $50 during the session, the order is executed. If the price stays above $50 until the close, the order expires – and the next day the trader decides afresh whether to place it again.

Why it matters for traders

Day orders prevent forgotten orders from being executed days later in a market situation that has changed completely. They suit day traders and intraday traders, who usually want to end the day flat – without open positions or pending orders. In forex, which is traded around the clock from Monday to Friday, there is no natural closing time, so trading platforms define their own end of day and offer different expiry options for pending orders. It is worth checking how these work before relying on them.