Good For Day or Good Till Expiry? It’s Important

CommSec CommSec

20 May 2020

When placing an order to buy or sell securities with CommSec, you need to assign an expiry. This tells us how long you would like your order to remain live in the market if it is not filled throughout the trading day.

There are two expiry instructions to choose from; ‘Good For Day’ or ‘Good Till Expiry. Each of these options trigger different actions and risks, which are important to consider in particular in periods of significant volatility.

 

Good for Day

If you select ‘Good For Day your order will only be valid for that trading day.

This means that if your order is not filled, or is only partially filled by the close of trading on that day, the balance of your order will be cancelled at the end of the trading day.

A ‘Good For Day’ order is a simpler way to manage your order and can be beneficial when you are new to investing, managing multiple orders or if you would like to manage your trading risk during times of market volatility.

 

Good Till Expiry

If you select Good Till Expiry you may nominate a specific expiry date or accept the default expiry of 20 trading days.

This means that if your order is not filled, it will remain in the market until the specified expiry date or the expiration of 20 trading days (whichever is the earlier). 

If you elect ‘Good Till Expiry’ you will need to make sure you keep an eye on your order each day and be ready to amend or cancel if market conditions change.

A Good Till Expiry order may be really useful if you believe it may take time for your order to be filled and you would like to maintain the priority of your order in the market. This may be appropriate when trading in a stock with minimal liquidity or where you believe that the market price may move in your favour over time. 

It’s important to note, the longer your order is in the market, the greater the chance your order may be exposed to adverse price swings driven by changing market conditions, news events or market sensitive announcements. The swings may be significant and you may suffer a loss. 

 

What happens after Expiry?

Following the expiration of a ‘Good For Day’ or ‘Good Till Expiry’ order you will need to place a new order to replace the expired order.  The impact of this action is that you will lose priority in the market and there may be orders ahead of you in the market at the same price.

 

Where can I find more information?

Please refer to our helpful how to guide to understand the Order Pad better and how to set the expiry that suit your needs here.

 

Comparison of Order Expiry Options

'Good For Day'

‘Good Till Expiry’

Duration

Valid only for trading day the order is placed into market.

Valid up until market close of the specified date or the default of 20 trading days (whichever is the earlier).

Benefits

Simpler way to manage:

 

  • Your order(s);
  • Multiple live orders;
  • Keeping track of all live orders;
  • Trading risk during periods of volatility; and
  • Minimising risk of long term exposure to market conditions which may adversely impact your order. 

Allows you to maintain priority at your nominated price in the order queue over multiple days if:

 

  • Your order is less liquid and the stock trades less frequently; or
  • You believe the market price is likely to move in your favour over a longer period of time.

Risks

When you enter a new order to replace the cancelled order, you will lose order priority and there may be other orders ahead of you in the queue at the same price.

The longer your order remains in the market the higher the risk that you may be exposed to any adverse price movements over the duration of the order.

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Disclaimer

This site is directed and available to and for the benefit of Australian residents only. © Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and both entities are incorporated in Australia with limited liability.

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