Good-Till-Date and Good-Till-Cancelled

Most orders die at the end of the day. A day order — the workbook also calls it an end-of-session order — has to be executed that trading day. If it is not, the exchange cancels it automatically.

Some traders want an order to outlive the session. The exchange offers two ways.

A Good-Till-Date order names a date. It stays alive for execution up to that date. If it has not been executed by then, it is cancelled or it expires automatically.

A Good-Till-Cancelled order names no date. It stays in the system until it is executed, or until the trader cancels it. It also dies when the contract expires.

So the only real difference is what kills the order. A date you chose, or the earliest of three events.

One GTD detail candidates miss. A GTD order joins the matching queue only once prices meet the day's daily price limit conditions. Until then it sits in a passive mode.

GTD, precisely. A GTD order specifies a particular date up to which the order can remain alive for execution. If it does not get executed by that specified date, it gets cancelled or expired automatically. It enters the exchange's matching process once the prices meet the DPL conditions of the contract; until the prices are within the DPL for the day, the GTD order remains in a passive mode.

GTC, precisely. A GTC order remains in the system till its execution or its cancellation by the trader. It remains active until the expiry of the contract if it is not executed, or until it is cancelled — whichever is earlier. So a GTC order has three exits, not two: execution, cancellation, and contract expiry.

The rest of the family in the same section. A day order dies at the end of the session. An Immediate or Cancel (IOC) order requires all or part of it to be executed immediately after it is placed, with any unexecuted portion cancelled automatically, so it never rests in the order book at all; the workbook says large-order traders use it where filling the whole order quickly is difficult. A Good-Till-Trigger (GTT) order is different in kind — it is broker-specific software, not exchange-specific, and once the trigger's limit price is touched in the market the order converts into a normal order and is pushed to the exchange terminal.

Living long enough to be modified. Because GTD and GTC orders survive across sessions, the modification rules matter to them more than to a day order. A member may modify or cancel his orders. Time priority does not change for a change in quantity or disclosed quantity. For all other changes to the order parameters, time priority changes. All unexecuted pending orders can be cancelled.

The workbook attaches no figure to either order type — no maximum number of days for a GTD, no day count for a GTC. The only hard boundary it gives is the contract's own expiry.

Mr Prakash and Ms Iyer both want to buy one lot of gold October futures — a 1 kilogram contract quoted per 10 grams — at Rs 71,000 per 10 grams, while the market sits at Rs 71,600. They place their orders on 2 September. The October contract expires on 5 October.

Ms Iyer buys 1 kilogram at 71,000 x 100 = Rs 71,00,000.

Mr Prakash, whose order died eight days earlier, has to chase the market. He buys on 30 September at Rs 71,400, paying Rs 71,40,000 — Rs 40,000 more for the identical kilogram of gold. Nothing about his price view was wrong. Only his choice of order life.

And Ms Iyer's GTC was never open-ended either. Had gold stayed above Rs 71,000, her order would have died on its own at the 5 October contract expiry, unexecuted.

Chapter 6 (Trading Mechanism), section 6.5.2 (Time-Related Orders), which lists the day order, GTD, GTC and IOC together, with the broker-level GTT immediately after, and section 6.5.3 on modification.

This section is examined as a matching exercise. Which order remains valid until the expiry of the contract — GTC. Which one specifies a date — GTD. Which cancels the unexecuted portion immediately — IOC. Which is broker-specific rather than exchange-specific — GTT. The discriminating detail is the GTD-and-DPL point: a GTD order stays passive until prices are within the day's price limit.

• A GTC order is not perpetual. It dies at the expiry of the contract if it is not executed or cancelled first — whichever is earlier. Candidates read till cancelled literally.
• GTD names a date; GTC names none. That is the one-line distinction the paper wants.
• Neither order survives the contract. A GTC order on an October contract cannot roll into November by itself.
• A GTD order is not always in the matching queue. It waits in passive mode until prices meet the day's DPL conditions, and only then enters matching.
• GTT is neither GTD nor GTC. It is a broker-level trigger facility, not an exchange order type, and it becomes a normal order once the trigger price is touched.
• Do not confuse GTC with IOC. IOC is the opposite extreme: it never rests in the order book, and any unfilled portion is cancelled at once.
• Modification costs time priority, except for quantity. Changing quantity or disclosed quantity keeps your place in the queue; changing anything else loses it. On an order meant to live for weeks, that is a real cost.