trading

day order

A brokerage order that expires at the end of the trading day if not executed, requiring the investor to re-enter the order the following day.

Example

“His day order to buy at $48 wasn't filled because the stock never touched that price before the market closed.”

Memory Tip

DAY order = expires at day's end. Must re-enter tomorrow if not filled.

Why It Matters

Day orders help investors maintain control over their trading activity by ensuring orders do not remain active indefinitely. Understanding this distinction is important because investors may assume their orders stay active until filled, which could lead to unexpected trades days or weeks later.

Common Misconception

Many people believe that placing a day order means their trade will definitely execute by the end of the day. In reality, a day order only remains active during that trading day and will be automatically canceled at market close if not filled, regardless of market conditions.

In Practice

An investor places a day order to buy 100 shares of a stock at $50 per share on Monday morning. If the stock never drops to $50 during Monday trading hours, the order expires at 4 PM when the market closes. The investor must manually resubmit the same order on Tuesday morning if they still want to make the purchase at that price.

Etymology

DAY (single trading day) ORDER. An ORDER valid only for the current trading DAY.

Common Misspellings

day-orderday ordderdaay order

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