What it is:
A day-around order is an order that replaces an order from another day. It is most common in the equities markets.
How it works/Example:
A day order is an order to buy or sell a security by the end of the day.
For example, let's assume that John Doe wants to buy Company XYZ , but he's going to Bermuda for two weeks tomorrow and doesn't want to deal with his while he's on vacation. So, John in a day order today 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 today, the order expires.
There is a chance that the trade won't happen, because Company XYZ shares opened at $5.25 this morning and may not get down to $5 by the end of the day.
Now let's say that lunchtime comes and John decides he really wants to get some Company XYZ before he gets on the plane, so he puts in a day-around order for $5.25, which is a price at which he's sure he can get the shares. The day-around order replaces the first day order but still expires at the end of the day today.
Why it matters:
Day-around orders are one of many ways that investors can keep trades under control, because they are a form of limit order. Day-around orders are actually rather long compared to other time limits investors can on orders -- in some cases, orders can expire in as little as a few minutes.