What is a GTT Order?
A GTT (Good Till Triggered) order is a special order type that remains active until the stock price reaches a level you specify, after which it automatically places a buy or sell order. Unlike regular orders that expire at day's end, a GTT order can stay active for up to 1 year (or until you cancel it), making it a powerful tool for patient investors.
How GTT Orders Work
You set a trigger price. When the stock's market price reaches your trigger price, the GTT system automatically places a limit order on your behalf. For example, if Tata Motors is at Rs 600 and you want to buy it at Rs 500, you set a GTT buy order with a trigger at Rs 500. If the price falls to Rs 500 on any future date within the order's validity, your buy order is placed automatically.
Types of GTT Orders
- Single GTT (One Leg): Triggers one action, either a buy or a sell, when the price reaches a level
- OCO GTT (One Cancels Other): Sets two triggers, a target price and a stop-loss price. Whichever is hit first triggers that order, and the other is cancelled automatically
Benefits of GTT Orders
- No need to watch markets daily
- Automates your pre-planned entry and exit points
- Useful for setting profit targets and stop-losses on long-term holdings
- Stays active for extended periods without re-entering manually
Limitations of GTT Orders
- GTT is not a full algorithmic trading system; it only places an order when triggered, not guaranteeing execution at that exact price
- The limit order placed by GTT may not execute if the market moves through your price quickly
- Not available on all broker platforms, though major Indian discount brokers like Zerodha support it
Who Should Use GTT Orders?
GTT orders are ideal for long-term investors who have identified stocks they want to buy at specific valuations. Instead of checking prices daily, you set your target price and let the system work for you. They are also useful for setting stop-losses on positions you hold.
Key Takeaway
GTT orders automate your pre-planned buy and sell decisions without requiring daily market monitoring. They are a disciplined investor's best tool for patient, target-based investing. Use the Lemonn app to research the right price levels to set for your GTT orders based on stock analysis and valuations.
