Home/Blogs/GTT Orders are the Gamechangers for Stock Market Investors

GTT Orders are the Gamechangers for Stock Market Investors

08 Feb 2024

Introduction:

Trading or investing in the stock markets requires you to always be on your toes, especially if indulging in intraday or swing trading. You need to work hard to select the right stocks, determine your entry and exit points with appropriate targets, and stop losses. However, as a swing trader, you might feel devastated when your stock reaches the target price but fails to notice, and then it starts moving in the opposite direction.

This can happen to even the most experienced traders. The essence of stock trading lies in the trader’s ability to buy and sell stocks at the right time and for the right price. Failing to execute this efficiently can lead to significant financial losses or regrets. But practically, it might not be possible to track the markets all the time. You may have to attend to other chores or forget to update your target orders daily.

Open Your free Demat Account in just 5 minutes!

This is where Good Till Trigger (GTT) orders can come to your rescue. They enable you to place buy or sell orders on the exchanges at pre-determined prices without having to track the markets throughout. Continue reading to know more about the GTT orders and learn how you can use them efficiently to maximise your stock trading profits.

What are GTT orders?

As mentioned, GTT stands for Good Till Trigger. These orders allow you to place buy or sell orders at the stock exchanged at pre-determined limit prices. They are activated when the stock’s market price reaches your designated level, known as the trigger price. The most distinctive feature of a GTT order is that it remains active until it is executed. 

A GTT order operates as a limit order for delivery and margin trading. Additionally, you can utilise the GTT orders to trade within the derivatives segment, where they function as carry-forward orders, with the order's validity extending to the contract's expiration date. However, you cannot place GTT orders for the intraday trading category. 

Benefits of placing GTT orders

The benefits of placing GTT orders on the exchanges include:

1. Precision in entry and exit

If not for GTT orders, you may have to place your target and stop loss orders daily. It’s because regular orders placed during market hours get cancelled once the market closes. 

However, you can specify your desired entry and exit points in advance with GTT orders. They ensure that your trades are executed only when the stock price reaches the desired levels, reducing the chances of overpaying for the stock or selling it below its potential value.

2. Saves time and effort

Another benefit of using GTT orders is that they help you save time and effort. They are accommodating for traders who cannot monitor the markets constantly. Once you’ve set a GTT order, you can rest assured that your order will be executed when the specified conditions are met, eliminating the need for constant market monitoring.

3. Inculcates emotional discipline while trading

One of the biggest challenges for many traders is controlling their emotions, especially during volatile market conditions. For example, suppose you have entered a trade expecting a bullish momentum. However, the trend reversed, and the stock went on a bearish run. In such a case, you may feel a strong urge to exit your position.

But with the help of GTT orders, you can automate your trade based on pre-determined conditions. They reduce impulsive decisions driven by emotions.

4. Helps in capturing market opportunities

Capturing market opportunities may become challenging for many traders, especially those who cannot monitor them constantly. GTT orders can help such traders to a great extent. You can set a GTT order to trigger a sell or purchase when the stock reaches the desired price level, thereby, capitalising on market opportunities without constantly looking at your trading screen.

To conclude

To sum it up, GTT orders have emerged as a valuable tool for traders, offering a blend of automation, precision, and discipline in stock trading. By leveraging GTT orders effectively, you can navigate the complexities of the stock markets with enhanced confidence, ensuring that your investment decisions align with your financial goals and risk appetite.

However, as with any other trading tool, you must understand the mechanics of GTT orders and their risks effectively before integrating them into your trading strategies.

 

Popular Stocks:  ONGC Share Price | SBI Life Share Price | UPL Share Price | TCS Share Price | Titan Share Price

Checkout more Blogs

You may also like…

Get Exclusive Updates

Be the first to read our new blogs

Intelligent investment insights delivered to your inbox, for Free, daily!

Open Demat Account
I wish to talk in South Indian language
By proceeding you’re agree to our T&C
Click here to see your activities