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.

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