In a GTT order, investors specify a trigger and a target price. The order is placed on the exchange only when the stock attains the trigger price, and is closed at the target price, facilitating targeted investment strategies and precise market entry or exit points.
GTT Order Meaning
A GTT order allows investors to set a trigger and target price, remaining inactive until the trigger is reached. Once triggered, the order is placed with the exchange, executing when the stock hits the target price. This precision facilitates strategic trading and goal attainment.
The GTT (Good Till Triggered) order mechanism is particularly useful for investors who are not able to monitor the stock market continuously. It allows them to plan their entry or exit from a stock based on their analysis and predictions of future price movements.
By setting a trigger price, investors can ensure that their order will only be activated under conditions that align with their investment strategy, such as buying at a low point or selling at a high point.
The addition of a target price means that the execution of the order is also predetermined, providing a clear strategy for capitalizing on expected price movements. This tool is especially beneficial in volatile markets where prices can fluctuate significantly, offering a method to manage risk and secure profits without constant market surveillance.
GTT Order Example
For example, if an investor sets a GTT order for a stock at a ₹ 50 trigger and ₹ 55 target. Once the stock hits ₹ 50, the order activates and is placed. When the stock reaches ₹ 55, the trade is closed. This method allows precise execution of trading strategies, enhancing financial outcomes.
What are the types of GTT?
Types of GTT are Single and OCO. In Single GTT, investors set a trigger and a target price; the order is triggered at the exchange at the trigger price and executed at the target price. OCO GTT combines a sell order with a stop-loss, executing one and canceling the other based on stock price movement.
- Single GTT Order: A single buy or sell order where investors define a trigger and target price. It’s sent to the exchange at the trigger price and executed at the target price, ensuring precise trade execution.
- OCO GTT Order: Combines a specific sell order with a stop-loss. If the stock’s price falls, the stop-loss activates, canceling the initial sell order, allowing investors to manage risks effectively.
Who Should Use GTT Orders?
GTT orders are used by investors who can’t constantly monitor market prices or those trading in large volumes and various assets. This feature simplifies managing investments and responding to market changes without needing continuous oversight.
In this example, an investor sets a GTT order for Tata Motors, targeting a purchase below the current ₹100 market price. They place a trigger at ₹80 and a target at ₹85. When the stock dips to ₹80, an order to buy at ₹85 or lower is activated, ensuring a strategic acquisition within the specified price range.
Benefits of GTT orders
The main benefit of GTT orders is automatic market tracking once set, with investors only needing to specify target and stop-loss prices. They offer convenience and peace of mind with no extra fees, apart from brokerage costs, and allow easy modification before activation.
- Automatic Tracking: Once a GTT order is placed, continuous market monitoring isn’t needed.
- Set Targets and Stop Losses: Investors simply set their preferred prices.
- Ease and Convenience: Relax while the GTT order works for you.
- Cost-Effective: No extra fees for using GTT, just the standard brokerage cost.
- Flexible Modifications: Orders can be adjusted easily before they’re triggered.
How To Place GTT Order In Alice Blue
To place a GTT order in Alice Blue, open your account in 15 minutes, access the ANT App, begin by logging in. Then, navigate to the “Orders” section and select “GTT” from the menu. Choose your desired “Scrip” and proceed to place your GTT order.
- Open Free Demat Account: Open a free demat with Alice Blue.
- Access ANT App: Start by logging in.
- Navigate to Orders: Click on the “Orders” section.
- Select GTT: Choose the “GTT” option from the menu.
- Place Order: Pick your desired “Scrip” and proceed to place your GTT order.
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What Is GTT Order? – Quick Summary
- A GTT order allows setting a trigger and target price for a stock, activating on the exchange at the trigger price, and executing when it reaches the target price.
- GTT orders come in Single and OCO types. Single GTT sets a trigger and target price for execution. OCO GTT merges a sell order with a stop-loss, executing or canceling based on price movement.
- GTT orders help investors who can’t constantly watch the market or trade in large volumes. They simplify investment management and market response without needing continuous monitoring.
- The main benefit of GTT orders is their automatic tracking, requiring only target and stop-loss settings. They provide convenience, peace of mind, no additional fees, and allow easy pre-activation modifications.
- To place an order in the ANT App, log in, go to “Orders,” select “GTT,” choose your “Scrip,” and proceed to set up your GTT order.
GTT Order – FAQs
What Is GTT Order?
A GTT order is a stock order where an investor sets a trigger and a target price. It’s placed on the exchange only when the stock hits the trigger price and closes once it reaches the target price.
What is the difference between GTT and limit order?
The difference between GTT and a limit order is that a GTT order remains active until a specified trigger price is hit, potentially up to a year, and then closes at a target price, while a limit order executes at a specified price may expire if not filled.
How does GTT order work?
A GTT order is like setting an alarm for a stock’s price. You choose a trigger price to start the order. Once the stock hits this price, your order to buy or sell activates, and it completes at your chosen target price or a better one.
How long does the GTT order last?
A GTT order remains active for one year from when it’s placed. It automatically deactivates after the trigger is hit and the order is successfully placed on the exchange.
What are the advantages of GTT orders?
The main benefit of GTT order includes not having to constantly watch the market, setting target and stop-loss prices in advance, and enjoying a hands-off approach post-placement. There’s no extra fee for using GTT, and orders can be modified before activation.
Does GTT order block margin?
When placing a GTT order, maintaining a margin upfront isn’t necessary, as the required amount is only needed once the stock reaches the specified trigger price.
Can I use the GTT order as stop-loss?
Yes, GTT orders can be used as stop-losses. They automatically sell your investment at a set price, protecting against significant losses if the market moves against your position.
What is a GTC order vs a GTT order?
A GTT order is sent to the exchange only when its trigger is hit, whereas a GTC order is placed with the exchange daily until executed or canceled, regardless of market conditions.
When should I order GTT?
Place a GTT order when you want to set specific trigger and target prices for a stock, with the order executing only when these price points are reached.
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