Check out the top 4 stocks to watch in October 2022
tastytrade logo
uploaded image

Mar 2, 2015

How Good Til' Cancelled (GTC) Orders Help Me Manage My Winners

By:The tastytrade Team

A Brief Story

I woke up was the day after my most recent move. Therefore, it is safe to assume that I was tired and not entirely on my A-Game.

In the haste of the move, I had forgotten that I had placed a couple earnings trades in tech stocks the day before (they were both directional vertical spreads). 

I opened up my trading platform at 10am EST (the market had been open for a half hour already) and noticed that I had 3 orders that had been filled already today. The two vertical spreads for earnings and another trade in $SPY (which had a few weeks left until expiration).

At order entry, I had put in Good ‘Til Canceled (GTC) orders for all of my different spreads because I didn’t know when I would get a chance to get at my computer (GTC orders are one tool I use to help me trade given my super busy schedule). Note: For those of you that are unfamiliar with a good til' cancelled (GTC) order, a GTC order is an order set up by an investor to automate the action of buying/selling a specific underlying at a specific price (I usually set GTC orders to close my positions once they have hit 50% max profit). This order is valid/active until the trade is executed or the investor decides to cancel the order.

All of a sudden I was wide awake and my day was looking up! Putting on the three GTC orders took me about 10 minutes and helped me sleep a little better that night (knowing that I didn't have to wake up with the opening bell to check my positions).

That's just one example of when GTC orders help me manage my winning trades, but they have proven useful on many other occasions as well. I like GTC orders for many reasons, but here are the three main reasons I use them to manage my winning trades.

3 Reasons I Use GTC Orders To Manage My Winning Trades

1. They Help Me Stay Mechanical

By putting in my GTC orders at 50% maximum profit (the upper end of the tastytrade methodology of managing winners), I stay mechanical in my trading.

Sometimes, I get antsy when I look at my positions and make rash decisions when closing orders. When left to my own devices, I found myself getting greedy on some trades. I would have a winning trade on and think to myself - the stock is still going up, I could make 70% profit rather than just 50%.

Using GTC orders makes me remove the emotion from my closing orders. The more I am able to remove emotion (fear and greed) from trading, the more successful I find myself becoming.

2. They Help Me Sleep At Night

I lead a very busy lifestyle and sometimes, I'm not always able to check in on the market or my positions when the market opens. If I'm on the go, GTC orders help me manage my winners without me even having to think twice. They're great for days where I cannot be around a computer/mobile device when the market opens and I had put on earnings trades the previous day.

3. They Give Me More Flexibility When I Travel

Being an avid traveler comes with its fair share of tradeoffs. I try and use GTC orders to make sure that managing my money is not one of 

I am able to go online once a day to check my account if necessary, but I don’t have to spend hours worrying about my positions. For a traveller like me, this is extremely important. Nothing can impede the journey, not even positions on in $SPY or $QQQ!

GTC Order Words of Wisdom

Just like everything in life, there are some things to be aware of if you choose to use GTC orders to help you stay mechanical. Here are some of my learnings from using GTC orders over the past few months...

  • You have to be careful about putting GTC orders on certain kinds of strategies. If you use the Jade Lizard trading strategy, you are not able to select all three legs and create a closing GTC order. You have to close the call spread separate from the naked put - otherwise, it will show up as an additional order.
  • For credit spreads, you have to subtract the 50% max profit to put in the GTC order.
  • For debit spreads, you have to add the 50% max profit to put in the GTC order.
  • Avoid putting in orders for trades that you are less familiar with.

If you are feeling intimidated by the whole concept of GTC orders, don’t worry. The first time I put on a GTC order, my hands were trembling and my heart went through palpitations (not really, but you get the idea).

The whole time I was worried that I was doing it wrong and the order would go through as a loser. Once I was able to get past the initial fear and actually placed and closed a trade with a GTC order, I became more comfortable with the idea of relying on the computer to close my orders for me.

Before putting in my first GTC order

After my first GTC order success

As you can probably see, GTC orders are useful for people who are have schedules that may not allow them to be at a computer during stock market hours (9:30am-4pm EST) and for people who travel frequently (regardless of wether the travel is for business or pleasure). They are also a great tool to use to help you take your emotion out of trading and keep your style mechanical.

If you would like to give GTC orders a try, put in a GTC order on a simple trade first (i.e. a naked options or vertical spread). This will help you feel get comfortable with the mechanics of placing this type of order.

Best of luck and if you have any questions, leave them in the comments!

Do you use GTC orders? If so, tweet to us at @tastytrade telling us your favorite thing about them suing the hashtag #gtclove

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on 

tastytrade is a trademark/servicemark owned by tastytrade.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”).

tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with tastytrade (“Marketing Agent”) whereby tastyworks pays compensation to Marketing Agent to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastyworks. tastytrade is the parent company of tastyworks. tastyworks and Marketing Agent are separate entities with their own products and services. tastytrade has different privacy policies than tastyworks.

Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.

© copyright 2013 – 2022 tastytrade. All Rights Reserved. Applicable portions of the Terms of use on apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastytrade’s podcasts as necessary to view for personal use.