Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Day Order

What it is:

A day order is an order to buy or sell a security by the end of the day.

How it works (Example):

Let's assume that John Doe wants to buy Company XYZ shares, but he's going to Bermuda for two weeks tomorrow and doesn't want to deal with his broker while he's on vacation. So, John puts in a day order to buy 1,000 shares of Company XYZ at $5. If the trade can't be executed at $5 a share by the end of the day, the order expires.

There is a chance that the trade won't happen, because Company XYZ shares opened at $5.25 and may not get down to $5 by the end of the day.

Why it Matters:

Day orders are one of many ways that investors can keep trades under control, because they are a form of limit order. Day orders are actually rather long compared to other time limits investors can put on orders -- in some cases, orders can expire in as little as a few minutes.