A Good This Week (GTW) order is a type of market order used in financial trading that remains active until the end of the trading week in which it was issued. Here we explore the nuances and mechanics of GTW orders.
Definition and Basic Concept
A Good This Week (GTW) market order is a trading instruction that remains effective until the closing of the last trading day of the week, unless it is executed or canceled beforehand. This type of order is commonly used by traders who wish to give their trade a defined timeframe without the need to monitor or manage the order constantly.
How it Works
When a GTW order is placed, the order will stay in effect and be eligible for execution at any point within that week. If the order conditions are met during this time, it will be executed; if not, it automatically expires at the end of the trading week.
Example
For instance, if a trader places a GTW order to buy 100 shares of Company XYZ at $50 per share on Monday, the order will remain active until Friday’s market close. If the stock hits $50 at any point during the week, the order will be executed. If not, it will expire at the end of the trading session on Friday.
Types of Market Orders
- Immediate or Cancel (IOC): Order to buy or sell a security that must be executed immediately. Any portion not executed is canceled.
- Good Till Canceled (GTC): Order to buy or sell a stock that remains active until the trader cancels it.
- Fill or Kill (FOK): Order that must be filled entirely and immediately; otherwise, it is canceled.
- Day Order: Valid only for the trading day on which it is placed.
Special Considerations
Time Sensitivity
GTW orders are suited for traders who have a weekly trading horizon. It offers flexibility for those who may be away from their trading screens but still want their orders to be active for a predetermined period.
Market Conditions
The effectiveness of GTW orders can depend heavily on market conditions. In highly volatile markets, traders must consider the possible outcomes of leaving an order open for a week.
Historical Context
GTW orders emerged as a way to accommodate different time horizons that traders and investors operate within. As trading technology advanced, the flexibility of placing timed orders became a standard feature offered by most brokerages.
Applicability
GTW orders are commonly used by:
- Swing Traders: Traders who hold positions for several days to weeks.
- Part-time Traders: Individuals who engage in trading around their full-time jobs.
- Investors: Those who want to set orders without constant monitoring.
Related Terms
- Limit Order: Order to buy or sell a security at a specific price or better.
- Stop Order: Order to buy or sell a security once it reaches a specified price, known as the stop price.
- Market Order: Order to buy or sell a security immediately at the best available price.
FAQs
How does a GTW order differ from a GTC order?
Can I cancel a GTW order before the week ends?
Do all brokerages support GTW orders?
Are GTW orders good for volatile stocks?
References
Summary
Good This Week (GTW) orders offer a flexible and time-bound trading strategy, useful for part-time traders and those with specific weekly trading goals. Understanding its mechanics, advantages, and limitations is essential for effective trading.
By leveraging the structured and time-bound nature of GTW orders, traders can optimize their strategies to align with personal and market conditions, ensuring better control over their trading activities.
