Key takeaways
- Time-in-force says how long an order stays open; it is set alongside the order type, such as market, limit or stop.
- Unless you choose otherwise, orders are day orders: unfilled, they generally cancel at the end of regular hours and do not carry into extended hours or the next day.
- Good-'til-canceled orders stay open until filled or cancelled, subject to time limits that vary by broker.
- IOC fills what it can at once and cancels the rest; fill-or-kill must fill completely at once or not at all; all-or-none must fill completely but can wait.
- FINRA Rule 5330 requires many open buy and sell-stop orders to be adjusted for cash dividends and splits, unless marked 'Do Not Reduce' or 'Do Not Increase'.
Every order to buy or sell a stock carries two instructions. The order type, such as market, limit or stop, says at what price it may execute. The time-in-force says how long it stays alive while it waits. The SEC's investor bulletin on order types lists the common timing instructions, and choosing the wrong one is a quiet source of surprises: orders that vanish at the close, or old orders that fill weeks later when you have forgotten them.
Day orders: the default
The SEC explains that unless you specify a time frame, orders are day orders: good only during the trading day they are entered. A day order that has not executed generally cancels at the end of regular trading hours, and it does not carry over to the extended-hours session or to the next trading day.
So a buy limit order at $48 on a $50 stock, entered at 10 a.m., either fills during that day's regular session or disappears at the 4 p.m. close. To try again tomorrow, you place it again.
Good-'til-canceled orders
A good-'til-canceled (GTC) order lasts until it is executed in full or cancelled. The SEC notes two broker-specific details: some firms let you set an automatic cancellation date and time, and the maximum time a GTC order can stay open varies by firm, so ask yours.
GTC orders are convenient for patient limit prices, but they keep working when you are not watching. Suppose you place a GTC buy limit at $45 on a $50 stock, then forget it. Weeks later the company reports bad news and the stock opens at $40. A buy limit fills at the limit price or better, so the order can execute at around $40: a "good" price, bought straight into news you had not seen. Reviewing open GTC orders regularly, and especially before earnings, reduces the chance of that. Market versus limit orders explains how limit prices work.
Immediate and all-or-nothing instructions
Three instructions control partial fills. The SEC defines them as:
| Instruction | Must fill immediately? | Must fill completely? | If it cannot |
|---|---|---|---|
| Immediate-or-cancel (IOC) | Yes | No | Unfilled part is cancelled at once |
| Fill-or-kill (FOK) | Yes | Yes | Whole order is cancelled |
| All-or-none (AON) | No | Yes | Stays active until it can fill in full, or is cancelled |
Worked example: you want 500 shares and only 300 are available at your price right now.
- IOC: 300 shares fill; the other 200 are cancelled.
- FOK: nothing fills; the whole order is cancelled.
- AON: nothing fills yet; the order waits for a moment when all 500 can fill together.
At the open and at the close
The SEC also describes two session-timed instructions:
- On open: a market or limit order that must execute when the market opens or re-opens; any part not executed in the opening trade is cancelled.
- On close: a market or limit order that must execute at the closing price; any part not executed in the closing trade is cancelled.
"Re-opens" matters after a trading halt; market circuit breakers explains when halts happen.
Extended hours have their own rules
Day orders do not reach the extended-hours sessions. FINRA describes pre-market trading as typically 7 to 9:30 a.m. ET, after-hours trading as 4 to 8 p.m. ET, and some overnight trading from 8 p.m. to 4 a.m. ET for certain stocks. It notes that firms may accept only limit orders in extended hours, and may have different policies on whether unexecuted extended-hours orders are cancelled or carried over to the regular session. Stock market hours covers the sessions themselves.
Open orders, dividends and splits
Long-lived orders meet corporate events. FINRA Rule 5330 requires a firm holding an open order, defined as an order to buy or an open stop order to sell, including GTC, limit and stop-limit orders, to adjust it on the day the stock goes ex-dividend or ex-distribution:
- Cash dividends: unless marked "Do Not Reduce", the order price is reduced by the dividend, then rounded down to the next lower price increment. A GTC buy limit at $50.00 becomes $49.60 when a $0.40 dividend goes ex. Dividends below one cent are ignored.
- Stock splits: the price is reduced and, unless marked "Do Not Increase", the share quantity is raised by the split ratio. A 2-for-1 split turns a buy limit for 100 shares at $50 into 200 shares at $25.
- Reverse splits: pending orders are cancelled.
The rule excludes orders governed by the rules of a national securities exchange, open stop orders to buy and open sell orders, so practice varies; check how your broker handles open orders around dividends and stock splits.
Choosing a time-in-force
- Trading during the day and watching the screen: a day order expires with the session.
- Waiting for a price that may take weeks: a GTC limit, reviewed regularly.
- Wanting no partial fill: FOK for now-or-never, AON if you can wait.
- Protective orders: see stop versus stop-limit orders for why a stop's fill price is not guaranteed.
The store screenshots for Learn to Trade Stocks Beginner, one of our education apps, show market, limit and stop orders placed with a virtual balance, a low-stakes way to practise before real orders. The investing basics hub lists the related guides.
Good to know
Frequently asked questions
What is the difference between a day order and a GTC order?
What is the difference between fill-or-kill and all-or-none?
Do day orders work in extended hours?
What happens to my open limit order when a stock pays a dividend?
Sources
- Understanding Order Types – Investor Bulletin (opens in a new tab)Investor.gov, U.S. Securities and Exchange Commission — accessed
- Extended-Hours Trading: Know the Risks (opens in a new tab)FINRA — accessed
- Rule 5330. Adjustment of Orders (opens in a new tab)FINRA — accessed
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