What is GTT Order? Learn Meaning of Good Till Triggered Orders & How to Execute them

In the fast-paced world of trading, staying ahead of the curve and capitalising on market opportunities can be crucial. Thus, buying and selling shares requires a person to keep track of prices. That’s where GTT order trading comes into play. 

Let’s read on to learn about what is the Good Till Triggered or GTT and how it affects the stock market.

What is GTT Order in the Share Market? 

The GTT full form in share market is Good Till Triggered. GTT order in share market is a type of order that allows traders to automate their trade executions based on predefined conditions. In simple terms, GTT trading meaning is to allow you to buy or sell shares at the desired price. Furthermore, without having to track the prices throughout.

With a GTT order, traders can set specific price levels. Such as stop-loss or take-profit, which, when reached, automatically trigger the execution of their trade. This innovative tool streamlines the trading process. It also provides traders with the flexibility to seize opportunities and manage risks more efficiently. Additionally, this type of order can be valid for all NSE, BSE Cash and NSE F&O. 

In intraday trades, GTT orders may not be placed because of their long-term validity (valid for a year).

How Does GTT Help You?

GTT (Good Till Triggered) orders can help your trading endeavours. GTT orders may provide a valuable tool for streamlining and automating trade execution, offering several benefits:

• Efficiency and Convenience: GTT in share market can eliminate the need for manual monitoring and constant order adjustments. Once set, they may remain active until triggered, saving you time and effort in managing your trades.

• Maximizing Trading Opportunities: By setting precise trigger conditions, such as specific price levels or indicators, your GTT in stock market can execute automatically when the predetermined criteria are met.

• Risk Mitigation: GTT orders may allow you to incorporate stop-loss and take-profit levels into your trades. This helps to secure profits without constantly monitoring the markets.

• Emotion-Free Execution: By automating trade execution through GTT orders, you can remove emotional biases that may impact your decision-making process. This helps you maintain discipline and stick to your GTT trading strategy without being swayed by short-term market fluctuations.

• Flexibility and Customization: Good Till Triggered orders can offer flexibility in order types, including limit orders, market orders, and stop orders. You can also customise triggers.

• Trade Automation: GTT orders can allow you to automate your trading strategy and execute trades even when you’re not actively present. This might  be particularly beneficial for traders, especially those who cannot monitor the markets constantly.

Why Use GTT?

GTT orders can be advantageous for active stock market investors. If you hold stocks in your demat account, such orders can help you sell all or some of them at a specific price. Once you sell, you can set a buy order for the same stocks at a lower GTT price, facilitating profit realisation without constant price monitoring.

What are the Types of Good Till Triggered Orders?

There are two types of good till triggered orders:

• Single – Only one Entry Price is needed, along with the order Price and Quantity.

• OCO (One Cancels Other) – This type of GTT requires two Entry Prices with the order Price and Quantity (considered as two legs). If one Entry Price is triggered, the other trigger is automatically cancelled. OCO can serve as Stop-Loss and Take-Profit legs.

What are the Conditions for Entry Price?

There must be a minimum price difference of 0.5% between the Last Trade Price (LTP) and the Entry price for any leg of GTT.

If an OCO GTT is placed alongside a regular order, there should be a minimum price gap of 1% between both legs of the GTT.

The relationship between Entry Price and Order Price is as follows:

• For Buy Side: Entry Price should be less than or equal to Order Price.
• For Sell Side: Entry Price should be greater than or equal to Order Price.

This condition is imposed to ensure that your order functions like a market order and can be executed successfully at the exchange.

How to Place a GTT Order?

The process of placing GTT orders varies depending on the broker that you use. However, in general, GTT orders can be placed either on a stand-alone basis or along with a base order.

Steps to place a stand-alone GTT order:

• Choose the stock for which you wish to set up a GTT.
• Visit the company’s website and click on additional options next to the sell button.
• Access the ‘Create GTT’ screen and input the necessary details.
• Finalise and create your GTT order.

Steps to place GTT order along with a base order:

• Choose the stock you wish to buy or sell.
• Visit the company’s website and click on the buy or sell option.
• Enter the necessary details for the base order. Decide whether you want to utilise GTT, opting for either the stop loss leg only or both stop loss and profit legs. (Note: These options are available exclusively for Delivery and BNPL products.)
• Place the order.

However, GTT order charges, expiration, margin to cover the purchases, and other risks are additional things to remember when placing GTT orders.

Managing GTT Orders

After initiating a GTT order, check under your portfolio’s ‘Orders’ section before the trigger activates. However, once the trigger has been activated, your portfolio is updated with the added or sold shares. If the trigger hasn’t been activated yet, you can modify or cancel pending GTT orders directly through your portfolio.

Paying for GTT Orders

After you place a GTT order, no funds will be blocked in your account. However, when the trigger is activated, your trading account will be earmarked with the necessary funds. If your account lacks the requisite balance, the triggered GTT order will be cancelled. Hence, maintaining a sufficient balance is advisable.

In the case of selling shares, your account is promptly activated. However, be mindful that the execution may encounter delays even post-trigger activation.

Also, there can be a possibility that the trigger price has been breached, yet the order remains unactivated. This occurs because the trigger aligns with the price movement relative to the stock’s Last Traded Price (LTP). For example, with an LTP of Rs. 400 and a trigger price of Rs. 450, the order activates when the LTP surpasses Rs. 450.

In some cases, the GTT execution price may vary from the trigger price because the order is initiated when the Last Traded Price (LTP) surpasses the trigger price. Nevertheless, execution may occur at the prevailing market price, potentially differing from the LTP, especially with a market price trigger. In the case of a limit price trigger, the GTT order would be executed at the specified limit price, nothing more, nothing less.

Execution of GTT Orders

Once you have placed a GTT order, it will remain in the market until it is executed or cancelled. If the security reaches the specified price, your order will be executed at that price. If the security does not reach the specified price before the order expires, your order will be cancelled.

Here are some common reasons why a Good-Till-Triggered (GTT) order might not be executed:

• The most fundamental reason is that your trigger price hasn’t been reached.
• If you have insufficient funds or securities to buy or sell when the trigger price is reached, the order won’t execute.
• If the market is closed when the trigger price is hit (e.g., during weekends, holidays, or outside regular trading hours), the order won’t execute until the market reopens.
• You may have intentionally or unintentionally cancelled the GTT order before it was triggered.
• Some brokers may have restrictions on certain types of GTT orders, such as those with very high or low trigger prices or those involving illiquid securities.
• In rare cases, technical issues with your broker’s platform or systems could prevent the order from being executed.

Is It Applicable to All Stocks?

If a stockbroker provides GTT order placement, this feature is applicable for trading in all listed stocks. However, these orders are specifically valid for scrips listed on NSE, BSE cash, and NSE F&O, with a 365-day validity from the execution date.

Can I Modify and Delete GTT Orders?

Yes, you can modify and delete the GTT orders.  Most platforms allow modifications as long as the trigger price hasn’t been hit. You can adjust details like price, quantity, or even the entire strategy. However, once triggered, the order becomes an active market order and modifications are usually no longer possible. Deleting is similar: active orders can’t be deleted, but you can easily remove any inactive ones you no longer need. Remember, managing your GTTs proactively helps maintain control over your investment plan.

Who Should Use GTT Orders?

GTT (Good Till Triggered) orders can be beneficial for investors and traders who prefer a more automated and systematic approach to stock market transactions. This feature can be useful for:

• Investors with specific target prices or trigger points for buying or selling securities.
• Those seeking to automate GTT trade executions without actively monitoring the market.
• Traders who want to minimise the impact of short-term market fluctuations.
• Individuals looking to implement long-term investment strategies without constant market surveillance.
• Investors may aim to avoid emotional decision-making by predefining entry or exit conditions.
• Those wanting to manage risk by setting stop-loss or take-profit levels in advance.

What are the Advantages of Good Til Triggered Orders? 

Here are some of the advantages of using GTT orders:

• Control Over Risk: GTT orders can help you control your risk by allowing you to set maximum and minimum prices for buying and selling securities.
• Timing: GTT orders can help you to time your entry or exit into the market by allowing you to place orders that will only be executed at a specific time.
• Avoiding Slippage: GTT orders can help you prevent slippage by ensuring that your orders are executed at the specified price.

What are the Disadvantages of Using GTT Orders? 

Here are some of the disadvantages of using GTT orders:

• Execution Risk: There is always the risk that the security will not reach the specified price before the order expires.
• Market Risk: The market price of the security could change between the time you place the order and the time it is executed.
• Liquidity Risk: The security may not be as liquid as you expect, which could make it difficult to execute your order at the desired price.

Things to Remember Before Investing in GTT

Before initiating GTT orders, it is advisable to consider the following points:

• Authorization using CDSL TPIN is required for triggering sell GTT orders based on equity holdings unless a power of attorney (POA) or demat debit and pledge instruction (DDPI) is provided.
• GTT OCO for index futures and options only accepts normal margin order (NRML) order types.
• In the Indian stock market, only F&O derivative contracts are allowed to use Buy GTT OCO.
• For the equity segment, a GTT (Good Till Triggered) order remains valid for one year from the placement date and is automatically cancelled after this period.
• A maximum of 250 GTTs can be active at once on a single account.
• Maintain sufficient cash and holdings in your trading account to ensure the correct triggering of GTT orders as per your specified conditions.
• A mandatory minimum difference of 0.5% between the entering price and the latest trading price exists.
• The minimum price gap for placing an OCO GTT order with a normal one should be 1%.
• Traders receive email notifications every time a GTT is activated and an order is placed on the exchange.

To Wrap It Up…

Whether you want to protect profits, limit losses, or seize market movements, GTT orders offer flexibility and customization to suit your trading strategies. So choose your entry and exit positions, place GTT orders, automate the process, and relax.

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