Day Order

A day order is a type of order to buy or sell a security that remains valid only for the current trading day. If the order is not executed by the end of the trading day, it is automatically canceled. Day orders are used by traders and investors who want to enter or exit a position at a specific price or within the current trading session but do not wish for the order to carry over to the next day.

Example

An investor places a day order to buy 100 shares of Tesla at $250. If the stock does not reach that price by the end of the trading day, the order is canceled.

Key points

• A day order is an order to buy or sell a security that is valid only for the current trading session.

• If the order is not filled by the end of the day, it is automatically canceled.

• Commonly used by traders who want to execute trades within the same day.

Quick Answers to Curious Questions

What happens to a day order if it is not executed?

If a day order is not executed by the end of the trading session, it is automatically canceled.

Why do traders use day orders?

Traders use day orders to enter or exit positions at specific prices within the same trading session without the order carrying over to the next day.

How does a day order differ from a good-till-canceled order?

A day order is canceled if not executed by the end of the trading day, while a good-till-canceled order remains active until it is executed or canceled by the trader.