Good-Till-Canceled (GTC) Orders (Open Orders)

A good-till-canceled order means just that: an order in the market until you cancel it. As a matter of procedure, some brokerage firms clear the books of open orders at the end of every day's trad­ing unless these orders are reentered.

Most short-term traders don't find it necessary to use good-till-canceled orders. They can be used when you'll be out of touch with

the market, but I strongly suggest you not trade when you are not in touch with the markets. Therefore, you won't need to use a good- till-canceled order.

I When to Use Certain Orders and When to Avoid Them

It is important to use the correct order at the right time inasmuch as this significantly affects the price at which you buy or sell and, of course, also affects your bottom line. One thing to remember about order placement is that you must be specific and decisive. Here are a few important things to remember when placing orders:

•  Use market orders for buying and selling if you're a day trader
in the SSF market. If you wait too long to get filled, then you
may miss your opportunity.

•  If you trade ultrashort term (i.e., day trade or short-term
trade), you can also use limit orders to buy at the best price
possible and sell at the best price possible. This can be readily
accomplished by keeping track of the bids and offers of the
market makers for the SSFs you're trading. In such cases, you
attempt to buy at the lowest offering price and sell at the high­
est bid price. Note, however, that commission costs are usually
higher on limit orders, and you also run the risk of not being
filled.

•  To a great extent the orders you use are a function of the sys­
tem or method you are using. This is discussed in detail in the
following section.

•  Make certain you cancel open orders once they are no longer
needed or valid.

•  Keep a record of all orders that have been entered, particularly
if you are trading in more than one SSF at a time.

•  If you trade SSF spreads, be especially careful to enter the sell
and buy orders correctly. Remember that to exit a spread such
as long Ford versus short GM, you sell Ford and buy GM.

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