A day order is the default order type on most trading platforms. When a trader places a buy or sell order without specifying a special duration, the broker usually treats it as a day order. This means the order is valid only during that trading session. If the order does not execute by market close, it is canceled.
Day orders help traders manage short-term trades or specific intraday price targets. Because the order expires automatically, traders don’t need to worry about old orders accidentally executing on later dates when market conditions may have changed. This makes day orders helpful for active traders who monitor markets closely.
Day orders can be used for various order types, including market orders, limit orders, and stop orders. The key feature is the time restriction. If the trader still wants the order active the next day, they must place a new one.
Day orders help traders control timing and prevent unwanted executions. They are ideal for intraday strategies or price levels that only make sense within the current trading session.
A day order is appropriate when a trader only wants the order active for that session. This includes scenarios such as targeting a specific intraday price, reacting to news events, or taking advantage of short-term volatility. Traders often use day orders when they expect the opportunity to be temporary. If the order doesn’t fill, they can reassess market conditions the next day.
Day orders expire at the end of the trading session, while GTC orders stay active until canceled or until they reach the broker’s time limit. Day orders help prevent unintended future trades, while GTC orders are designed for longer-term price targets. Traders choose between them based on how long they want their order to remain in the market.
If the market does not reach the expected price during the session, the order will expire without being filled. In fast-moving markets, a day order may also partially fill and then expire, leaving the position incomplete. Traders must monitor their orders throughout the day to ensure the order behavior matches their strategy.
A trader places a limit order to buy a stock at $90 during the trading session. The price never dips that low, so the order remains unfilled. When the market closes, the day order automatically expires, preventing the trade from executing the next morning under different conditions.
