What Is Good Till Triggered (GTT)?

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  • 06 Oct 2023
What Is Good Till Triggered (GTT)?

Key Highlights

  • GTT (Good Till Triggered) allows traders to place buy or sell orders for stocks that remain active until a specified trigger condition is met. Its validity period is one year.

  • GTT orders get executed only when the specified trigger conditions are satisfied, ensuring that orders are not placed prematurely.

  • With the GTT features include a single trigger, and one cancels other (OCO), offering flexibility in setting target and stop loss prices.

  • Sell GTT orders triggered by equities holdings must be authorised using CDSL TPIN, unless POA or DDPI is provided.

An order with the Good Till Triggered (GTT) feature remains in effect until the trigger condition is satisfied. The trigger's validity period is one year. In the event that there are enough funds in the account, a limit order is placed and carried out. Every time a GTT is triggered and an order is placed on the exchange; traders receive a notification to the registered email address and mobile phone.

No actual order is placed by using the GTT Feature until and unless the “Trigger Conditions” that you specify are satisfied. The trading platform stores the trigger conditions that you have specified. It places a limit order to the exchange as soon as the trigger conditions are satisfied. An important thing to note is that, for the CNC-type orders on the NSE and BSE, the GTT in share market is only permitted on the Equity Cash Segment.

You can use the GTT feature for both buy and sell orders.

Buy GTT: For building triggers to purchase assets, use the “buy GTT” order. When the trigger price is reached with a GTT purchase order, a buy order with the specified limit price is posted on the exchange.

Sell GTT: For selling short F&O contracts or selling holdings, use sell GTT. Sell GTT allows you to place a target order, stop loss order, or both. Only if the shares are in the demat account and the order is filled on the exchange is the sell GTT order for holdings carried out.

An Illustration of GTT Order

Let’s understand more about GTT with the help of an example. Since, two cases (buy and sell) exist here, let’s look at each of them individually.

GTT For Buy Order

It is necessary to input the trigger price and target price below the current market price (CMP) in order to make a GTT order for purchasing below the CMP.

Let’s say Ashok Leyland's CMP is Rs. 1264. Entering 2000 as the trigger price and 2200 as the target price places a GTT order. The exchange receives a purchase limit order for Rs. 2200 when the CMP reaches the trigger price.

GTT For Sell Order

A GTT order must have the trigger price and target price entered above the current market price (CMP) in order to sell above the CMP.

For instance, the CMP of Ashok Leyland is Rs. 789. 880 is the target price, and 965 is the trigger price when placing a GTT. The exchange receives a sell limit order for 880 when the CMP reaches the trigger price.

GTT in share market comes in two categories:

Single trigger: A single trigger price that you enter could be used to start either a target order. This is possible if the last traded price (LTP) you choose is higher than the current market price). Or else, you can use a stop loss order if the LTP you choose is lower than the current market price.

One cancels other (OCO): This feature type is applicable to the stocks that you already have. You can enter two trigger prices, one of which would be above the current market price and act as a target price. The other one shall be below the CMP and will act as a stop-loss price.

GTT can assist you in buying or selling a stock at the price you choose, whether you have already invested in it or plan to do so. The order will be carried out as soon as the market price of the stock and the GTT trigger price coincide. GTT has a one-year validity period, and the order will expire if the stock doesn't rise to the desired price during that time.

Things To Note About GTT Orders

You must be aware of the following facts before placing GTT orders.

  • Sell GTT orders triggered by equities holdings must be authorised using CDSL TPIN. his is not applicable if you provide power of attorney (POA) or demat debit and pledge instruction (DDPI).
  • For index futures and options, GTT OCO only accepts normal margin order (NRML) order types.
  • In the Indian stock market, only F&O derivative contracts are permitted to use Buy GTT OCO.
  • For the equity segment, a GTT (Good Till Triggered) is good for a period of one year following the placement date. The GTT will be automatically cancelled after a year, although it can be formed again if necessary.
  • A maximum of 250 GTTs may be active at once on one account.
  • You must always keep a sufficient cash level and a sufficient number of holdings in your trading account for all of your GTT orders. This is necessary to trigger the orders correctly in accordance with the conditions you specify.
  • A minimum difference of 0.5% between the entering price and the latest trading price is mandatory.
  • The minimum price gap when placing an OCO GTT order with a normal one should be 1%.
  • Every time a GTT is activated and an order is made on the exchange, traders get an email notification.

Conclusion

Brokers have developed the GTT trigger as a replacement for GTC (Good-Til-Cancelled). The GTT provides inactive stock market investors with a way to reduce losses and book profits without actively monitoring the markets. However, GTC continues to offer several functions that GTT does not. If you are an enthusiastic stock market investor, GTT orders may be advantageous. Such orders can assist you in selling all or a portion of the stocks you already have in your demat account at a certain price. Once you sell, you can repurchase the identical equities with a buy order at a lower GTT price. This will get you profits without constantly checking prices.

FAQs on GTT Order

You can trade in every listed stock using the feature if a stockbroker provides GTT orders. The orders, however, are limited to stocks listed on the NSE, BSE Cash, and NSE F&O. Such orders have a 365-day validity period starting on the day they are executed.

GTT is automatically placed after the predetermined price is triggered. It depends on the GTT price and the kind of order (buy or sell) you placed. Once the order is triggered, it has a one-time validity and cannot be altered or modified.

When it comes to putting a GTT order, the majority of stockbrokers have various terms. However, SEBI has established rules for allocating a maximum of 50 GTT orders.

In most circumstances, you can change or cancel your GTT orders on the Indian stock exchange. But that depends on the particular features and capabilities that your broker or trading platform offers.

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