Time in Force

Time in force is an instruction attached to a trade order that tells your broker how long the order should remain active before it is automatically cancelled if not executed. Every trade order you place must specify a time in force condition along with the order type, the security, the price, and the quantity. Without a time in force instruction, most brokers default to a day order, which expires at the end of the current trading session.

Think of time in force as the expiration date on a grocery coupon: useful on the day it is issued but automatically void after a defined period.

The Main Time in Force Options

Exchanges and brokers support several time in force designations, each suited to different trading situations and strategies.

• Day (DAY): The most common designation. The order remains active until the end of the regular trading session and cancels automatically if not filled. Day orders do not carry over to the next trading day.
• Good Till Cancelled (GTC): The order remains open until it is either executed or you manually cancel it. Most brokers impose a maximum duration on GTC orders, typically 60 to 90 calendar days, after which they cancel automatically. GTC orders are useful for limit orders placed at prices significantly away from the current market.
• Immediate or Cancel (IOC): The order must be filled immediately, either in whole or in part. Any portion of the order that cannot be executed immediately is cancelled. IOC orders are common in algorithmic and institutional trading where partial fills are acceptable.
• Fill or Kill (FOK): The entire order must be filled immediately and completely, or it is cancelled in its entirety. No partial fills are accepted. FOK is used when you need to buy or sell a specific quantity all at once without splitting the order.
• Good Till Date (GTD): The order remains active until a specific date you choose. If not executed by that date, it cancels automatically. GTD gives you more precision than GTC for orders tied to an expected event with a known timeline.
• At the Opening (OPG) and At the Close (CLO): Orders designated for execution specifically at the opening or closing auction of the trading day. These are used by institutions to obtain prices as close to the official open or close as possible, which matters for index-replicating portfolios and performance benchmarking.

How Time in Force Works with Order Types

Time in force and order type work together to define exactly when and how your trade executes. The combination you choose has real cost implications.

A GTC limit order at a price 5% below the current market will sit in the order book for weeks or months until the stock either reaches your price or the GTC expiration triggers cancellation. A day limit order at the same price simply expires at 4:00 p.m. Eastern Time without executing if the stock never pulls back to your level during the session.

Market orders cannot logically be combined with GTC because a market order is designed for immediate execution. If it cannot fill right now, it should not sit waiting. Most brokers reject or convert GTC market order combinations automatically.

Extended-Hours Trading and Time in Force

Extended-hours trading sessions, meaning pre-market from approximately 4:00 a.m. to 9:30 a.m. and after-hours from 4:00 p.m. to 8:00 p.m. Eastern Time, operate on separate order books. A standard day order placed during regular hours typically does not carry over into extended-hours trading unless you specifically select an extended-hours time in force designation.

Most retail brokers offer a separate extended-hours time in force option for limit orders, designated differently by each platform. You need to actively select this option if you want an order to remain live into the pre-market or after-hours session. Extended-hours liquidity is typically lower, and spreads are wider, so large orders can face higher market impact during these periods.

GTC Orders and Corporate Actions

GTC orders require active management because they remain open through corporate actions that can change the economics of the trade. If a company you have a GTC limit buy order on announces a dividend, stock split, or merger, the order price may no longer reflect your original intent once the ex-date passes.

Most brokers automatically cancel GTC orders affected by stock splits on the ex-date, requiring you to re-enter the order at the adjusted price. However, dividends and other corporate actions do not typically trigger automatic cancellation. Review open GTC orders regularly to confirm they still reflect your current investment thesis.

Sources

• https://www.sec.gov/investor/pubs/tradexec.htm
• https://www.finra.org/investors/highlights/understanding-order-types
• https://www.fidelity.com/learning-center/trading-investing/order-types