Utilising GTT orders in the stock market is a straightforward process. Investors can place buy or sell orders for desired stocks at their preferred prices. Once the stock price reaches the specified trigger price, the GTT order is automatically executed, facilitating seamless transactions. For instance, if an investor wishes to purchase shares of a company, but only at a certain price point, they can set a GTT buy order accordingly. Subsequently, when the stock price hits the predefined trigger price, the GTT order is triggered, enabling the investor to acquire the shares at the desired price.
Why use GTT?
GTT orders are a valuable tool for active investors. If you already own stocks, you can use GTT orders to sell them at a specific price, locking in profits. Once sold, you can immediately place another GTT order to buy the same stocks at a lower price, potentially increasing your returns. This strategy allows you to capitalize on market fluctuations without constant monitoring.
Types of GTT orders in stock market
GTT orders offer investors flexibility through two distinct types:
1. Single Trigger
This type of GTT order enables investors to set a single trigger, wherein the order is executed once the Last Traded Price (LTP) matches or surpasses the specified trigger price. Single trigger GTT orders are ideal for entering or exiting positions in the market.
2. One Cancels the Other (OCO) Trigger
In contrast, the OCO trigger allows investors to set both stop-loss and target triggers simultaneously. Upon the fulfilment of either trigger condition, the corresponding order is executed, while the other trigger is automatically cancelled. OCO triggers empower investors to manage risk and optimise their trading strategies effectively.
Some facts about GTT order in stock market
Several noteworthy facts regarding GTT orders include:
- Authorisation requirement for equity holdings: Selling equity holdings via GTT orders necessitates authorisation through CDSL TPIN, unless Power of Attorney (POA) or Delivery Instruction Slip (DIS) is provided.
- Timing of GTT orders: While GTT orders can be placed at any time, they are triggered and executed exclusively during market hours.
- Limit on active GTT orders: Investors can maintain up to 100 active GTT orders per account simultaneously.
- Impact of corporate actions: GTT orders pertaining to shares affected by corporate actions exceeding a 5% market value change are cancelled on the ex-date/record date.
- Product type limitation: GTT orders are applicable solely for Cash and Carry (CNC) and Normal (NRML) product types, excluding other product categories.
- Category changes and pending GTT orders: GTT orders are annulled if a stock undergoes a category change while a pending GTT order exists.
What are the benefits of GTT?
The utilisation of GTT orders offers investors a myriad of benefits, including:
- Time-saving: GTT orders alleviate the need for continuous market monitoring, enabling investors to execute trades efficiently.
- User-friendly interface: The simplicity of GTT orders renders them accessible to investors of varying experience levels, facilitating seamless utilisation.
- Enhanced trade management: With GTT orders, investors can formulate comprehensive entry and exit strategies by incorporating stop-loss and target triggers, thereby optimising trade outcomes.
- Extended validity period: Unlike conventional orders, GTT orders remain active for an extended duration, ranging from a single trading day to one year, depending on the order type.
Is GTT order app licable on all stocks?
You can use GTT orders to trade most stocks listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). However, it's important to note that GTT orders are valid for 365 days from the date they are placed.
Conclusion
In conclusion, GTT orders represent a valuable tool for investors seeking to navigate the complexities of the Indian securities market. Offering a blend of convenience, flexibility, and efficiency, GTT orders empower investors to execute trades with precision while minimising the need for constant supervision. However, it is crucial to acknowledge that GTT orders are not without limitations and room for improvement. As the landscape of the securities market continues to evolve, enhancing the functionality of GTT orders could further augment their efficacy, making them a formidable contender to traditional order types like GTC (Good Till Cancelled). By harnessing the potential of GTT orders, investors can embark on a journey towards more informed and strategic trading decisions.
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