Validity instructions indicate when an order may be filled. The most common validity instruction is the day order. A day order is good for the day on which it is submitted. If it has not been filled by the close of business, the order expires unfilled.
Good-till-concelled orders (GTC) are just that. In practice, most brokers limit how long they will manage an order to ensure that they do not fill orders that their clients have forgotten. Such brokers may limit their GTC orders to a few months.
Immediate or cancel orders (IOC) are good only upon receipt by the broker or exchange. If they cannot be filled in part or in whole, they cancel immediately. In some markets these orders are also known as fill or kill orders. When searching for hidden liquidity, electronic algorithmic trading systems often submit thousands of these IOC orders for every order that they fill.
Good-on-close orders can only be filled at the close of trading. These orders often are market orders, so traders call them market-on-close orders. Traders often use on-close orders when they want to trade at the same prices that will be published as the closing prices of the day. Mutual funds often like to trade at such prices because they value their portfolios at closing prices. Many traders also use good-on-open orders.
Stop orders
A stop order is an order in which a trader has specified a stop price condition. The stop order may not be filled until the stop price condition has been satisfied.
Traders often call stop orders stop-loss orders because many traders use them with the hope of stopping losses on positions that they have established.
Clearing Instructions
Clearing instructions tell brokers and exchanges how to arrange final settlement of trades. Traders generally do not attach these instructions to each order—instead they provide them as standing instructions. These instructions indicate what entity is responsible for clearing and settling the trade.
