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 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 on orders -- in some cases, orders can expire in as little as a few minutes.