What is a GTEM order?

By Chad Langager AAA
A:

GTEM stands for "good 'til extended market". This is a type of duration order that investors can place with their brokers, which determines how long the order will remain active. A GTEM buy or sell order remains open or exercisable for the entire day and is an active order in both the pre- and after-hour markets. This expands on the day order, which is only active during regular market hours and is canceled when these market hours are over.

GTEM effectively allows for the order to be exercised at any point when the security trades as long as the criteria for the order are met. This type of order will typically be accompanied with a pricing constraint on the order such as a stop or limit, because of the relative volatility of the extended market.

For example, a trader may place a GTEM stop-loss order on the stock of a company that is set to announce its earnings for the quarter after the close of regular market trading. If the earnings were disappointing, this may lead to a decline in the price of the shares, turning the GTEM stop loss order into a sell order in the after-hours market in which case the position will probably be sold. Typically, if the trader doesn't have a GTEM or other after-hours order, he or she would have to wait until the market opened the next day, which could result in getting a much lower price than what could be had in the after-hours market.

For related reading, check out The Basics Of Order Entry.

RELATED FAQS

  1. How do I invest or trade market indicators?

    Read about how investors can trade actual market indicators, such as the S&P 500 Index, rather than specific stocks or commodities.
  2. What is a common strategy traders implement when using the Wide-Ranging Days pattern?

    Learn about wide-ranging days and how traders use this single-session candlestick pattern to predict trend reversal and create ...
  3. What trading strategies help investors withstand a drawdown?

    Understand the concept of drawdown and the importance for traders of having a trading strategy that takes temporary drawdown ...
  4. What are some ways to reduce downside risk when holding a long position?

    Learn about the various methods a trader can use to minimize risk of loss or protect a portion of profits in an existing ...
RELATED TERMS
  1. Risk Financing

    The determination of how an organization will pay for loss events ...
  2. Captive Value Added (CVA)

    The financial benefit that an organization would gain by using ...
  3. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  4. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
  5. Bornhuetter-Ferguson Technique

    A method for calculating an estimate of an insurance company’s ...
  6. Average Severity

    The amount of loss associated with an average insurance claim. ...

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    How do I invest or trade market indicators?

  2. Chart Advisor

    Is Now the Time to Invest in North America?

  3. Chart Advisor

    These Oil Service Stocks Are Ready For ...

  4. Trading Strategies

    The Top Five Stocks For Novice Swing ...

  5. Options & Futures

    Advantages Of Trading Futures Over Stocks

Trading Center