Day order
Family XII · Other terms
Not to be confused with forex day trading, day trading, trading day.
Day order is a time-in-force instruction that limits an order's life to a single trading session. If the order is not filled by the close of that session, it expires without further action. The exact cut-off time depends on the venue and the instrument, so it varies by market.
How a day order works
When a trader submits a day order, the broker or exchange keeps it active only for the current session. If the order is partially filled, the unfilled portion is cancelled at the end of the day. The definition of "end of day" is not universal: it may be the close of the regular session, the close of after-hours trading, or a broker-specific cut-off. Traders should check the order handling rules of their venue.
Worked example
A trader places a day order to buy 500 shares with a limit price of $50.00. The stock trades between $50.20 and $51.00 during the session, so the limit is never reached. At the close, the order expires.
Variations and alternatives
Day orders are one of several time-in-force options. A good-till-cancelled order remains active until executed or explicitly cancelled, which may be days or months later. Some markets also offer good-till-date orders that expire on a specified date. The availability of these order types and their exact expiry rules differ by broker and by country.
Often confused with
- forex day trading
- Forex day trading is a trading style in which positions are opened and closed within the same day in the foreign exchange market, whereas a day order is a specific order instruction that expires at the end of the session; the visible sign is that forex day trading describes a strategy, while a day order describes a single order's time limit.
- day trading
- Day trading is the practice of buying and selling financial instruments within the same trading day, often multiple times, whereas a day order is a time-in-force instruction attached to an individual order; the visible sign is that day trading refers to a person's overall activity, while a day order refers to one order's lifespan.
- trading day
- A trading day is a calendar day on which a given market or exchange is open for regular business, excluding weekends and published holidays, and it defines the session during which orders can normally be executed.