Order Types and Trading Parameters
Let’s learn more about order types and trading parameters. For members to enter trades through the trading systems, they must fulfil a few conditions of the exchange. They are requirements pertaining to time, price and other various conditions such as regular market order, limit order, stop loss order, immediate or cancel an order, good till day order, good till cancelled order, good till date order and spread order. These prerequisites can be used in any permutation and combination, hence providing the user with good flexibility. A summary of the condition is given below:
- Time conditions
- Good till day order:
- A ‘day order’ is an order that has the validity only for the day it has been entered on. If the order does not find matches and is unable to be executed during the trading session, it automatically lapses on the system i.e. it gets cancelled. A new order will have to be placed in the next trading session.
- Good till cancelled (GTC):
- A ‘Good Till Cancelled’ order remains active in the trading system until the order is cancelled by the user i.e. this type or order stays intact over consecutive trading sessions and does not lapse at the end of every trading day. The maximum number of days a GTC can exist on the system is specified by the commodity exchange. After this, the order is automatically cancelled. The counting of days includes weekdays, weekends and holidays of the calendar year.
- Good till date (GTD):
- A ‘Good Till Date’ order lets the trader choose the date until when the order should stay in the system if no matches are found. Similar to GTC orders, there is a limit on the maximum number of days an unexecuted order can stay in the system. The order gets cancelled on the day or date chosen by the user. The total number of days is inclusive of the day the order is entered.
- Immediate or Cancel (IOC)/ Fill or kill order:
- An ‘Immediate or Cancel’ order allows the user to trade contracts as soon as the orders are released into the trading system. If the trade does not go through, the order is cancelled from the system. In this case partial match is possible for orders. The unmatched part of the orders gets cancelled simultaneously.
- All or none order:
- The ‘All or None’ order is a type of entry where the complete quantity of the order has to go through. If this does not happen, the order is cancelled.
