Good Til Canceled

A good-til-canceled (GTC) order:

1. A.Expires at the end of the dayThat is the day order, which is GTC's opposite number. The label itself settles it: good-til-cancelled names cancellation as the terminating event, not the closing bell.
2. B.Cannot be cancelledRead the name literally and this collapses: cancellation is the one event the order is explicitly defined around. Far from being uncancellable, cancelling is exactly how a GTC order ends when it never fills.
3. C.Executes immediately at any priceThis describes a market order, which is a statement about how an order fills. GTC is a statement about how long an order lives. The two are separate attributes, and the stem is asking about duration.
4. D.Stays open until executed or cancelledCorrect - persists across sessions.

Why: A GTC order remains open until it is executed or cancelled.

A good-til-canceled (GTC) order is best described as an order that...

1. A.expires at the end of the trading session in which it was enteredThat is a day order, which is the opposite duration instruction.
2. B.remains in effect until executed or cancelled by the customerCorrect. A GTC order survives across sessions until it fills or is cancelled.
3. C.guarantees execution at the customer's stated priceGTC says nothing about price guarantees. It only controls how long the order remains in force.
4. D.must be filled in its entirety or not at allThis confuses duration with an all or none quantity condition.

Why: A GTC order stays live across trading sessions until it is executed or the customer cancels it, unlike a day order that dies at the close of the session in which it was entered.

With a stock at 50, a customer enters a GTC buy limit at 48. Over the next month the stock rises steadily to 55 and never trades below 50. What is the status of the order?

1. A.It was cancelled automatically when the stock rose above 50A rising market does not cancel a resting buy limit. Only execution or a customer cancellation ends it.
2. B.It remains open and unexecutedCorrect. The stock never reached 48, so nothing filled, and the GTC instruction keeps the order alive.
3. C.It filled at 50 when the stock first traded thereA buy limit at 48 cannot fill at 50. It will not pay more than the limit.
4. D.It converted to a market order and filled near 55Limit orders never convert to market orders. That would eliminate the price protection the customer chose.

Why: A buy limit fills only at the limit price or lower. Because the stock never traded down to 48, nothing filled, and because the order is GTC it remains open awaiting a decline.

A customer has an open GTC buy limit for 400 shares at 30. The issuer executes a 2-for-1 forward split. How is the open order adjusted?

1. A.800 shares at a limit of 30Doubling the shares without halving the price doubles the customer's dollar commitment.
2. B.800 shares at a limit of 15Correct. The quantity doubles and the price is halved, preserving the 12,000 dollar commitment.
3. C.400 shares at a limit of 15Halving the price without doubling the shares cuts the customer's intended position in half.
4. D.400 shares at a limit of 30, since limit orders are not adjustedOpen orders are adjusted for splits. Leaving it unchanged would trigger an immediate unintended fill.

Why: For an even split the limit price is halved and the share quantity is doubled, so the order becomes 800 shares at a limit of 15. The total dollar commitment is unchanged.