What is a day order?
A day order is defined as an instruction from a trader to their broker, to buy or sell a certain asset. Setting a day order means that the deal has to be executed if an asset hits a specified price (referred to as the level) at any point during the trading day on which the order is made.
The day order will expire if the price specified in the order is not met by the time the market closes. There are two different types of day order: stop day orders and limit day orders. If the price at which the trade will be executed is more favourable than the current market price then it is a limit day order, and if it is less favourable it is a stop day order. The meaning of day orders differ from good-‘til-cancelled (GTC) orders, or orders that specify a longer or shorter time period for execution.
Most brokers and trading platforms tend to use day orders as the default means of trading, meaning that a trade will expire if unexecuted after a day unless a different time frame is specified. For example, with IG Bank, you can place a day order by going to the ‘order to open’ tab on the deal ticket and selecting today’s date under ‘time in force’.