Good-Till-Trigger

Most order types — day, good-till-date, good-till-cancelled, immediate-or-cancel — live inside the exchange system. Good-Till-Trigger does not.

A GTT order is held on the broker's own software. Nothing about it is visible in the exchange order book, and the exchange has no record of it. The broker watches the market, and the moment the price you named is touched, the broker generates a normal order and sends it to the exchange terminal.

So it is a standing instruction to your broker, dressed up to look like an order. Which matters, because it means the facility exists only if your broker offers it, on your broker's terms.

The workbook is explicit that these are not exchange specific but broker specific software which handle such orders, and that once the limit price of the trigger is touched in the market, they are converted into normal orders and pushed into the trading terminal of the exchange.

Compare the four order types that do live at the exchange:

One wrinkle the workbook flags for GTD: such an order enters the matching process only once prices come within the contract's Daily Price Limit for the day. Until then it rests passive.

Gold futures are quoting Rs 50,400 per 10 grams in June. A trader will not chase them, but wants a long position if the market gives him Rs 49,000. He does not want to watch the screen until 11:30 pm.

He places a GTT buy at Rs 49,000 with his broker.

Nothing appears in the exchange order book. Three sessions later gold prints Rs 49,000, and at that instant the broker's system fires a buy order into the exchange terminal.

On the standard gold lot of 1 kilogram, quoted per 10 grams:

Contract value = 100 units of 10 g x Rs 49,000 = Rs 49,00,000
Initial margin plus ELM at, say, 5%           = Rs  2,45,000

The Rs 2,45,000 is blocked only when the order actually executes — a GTT that never triggers blocks nothing. That is precisely its attraction, and precisely its risk: there is no queue position banked in advance, so in a fast market the price can trade through Rs 49,000 and the converted order can still miss.

Chapter 6 (Trading Mechanism), section 6.5.2, in the list of time-related orders. The examinable line is the one about ownership: GTT is a broker facility, not an exchange order type. Expect it as the odd one out in a list of exchange order types, and expect GTD and GTC to be tested on their expiry behaviour.

• GTT is not an exchange order. It is the one item in section 6.5.2 that the exchange never sees until it converts.
• GTT is not the same as a stop loss. A stop loss is generally placed after entering a trade, to cap a loss on an existing position; a GTT is commonly used to enter one.
• A GTC order dies at contract expiry even if never cancelled — "good till cancelled" does not mean forever.
• IOC leaves nothing in the order book. Any unexecuted portion is cancelled instantly, not parked.
• Trailing stop loss is also a broker-level facility, offered in rupees or as a percentage, and it only ever ratchets in the favourable direction — it does not adjust back down.
• A triggered GTT converts into an ordinary order and then joins the queue on price-time priority like anything else. The trigger buys you no precedence.