Day order definition
A day order is a limit or stop order given to a broker to execute a trade at a specific price before the markets close that day. If the price is not reached before the markets close, the order is canceled.
A day order is the most common of the several types of limit orders. Other limit orders include good ‘til canceled (GtC) and fill or kill (FoK) orders.
When should you use a good for day order?
Most orders placed are day orders, including market orders that are always fulfilled immediately. Traders tend to use day orders when entering positions. This order type is particularly useful for intraday traders who buy and sell multiple securities in a single day.
You should use a good for day order when you’ve analyzed the market before open and have an expectation of which securities you’d like to sell and buy throughout the day. Good for day orders release you from needed to monitor a specific security constantly, so you can monitor the entire market at once and adjust your day orders as needed.