Time in Force
Definition
Time-in-force (TIF) is an order instruction that tells the broker how long your order should remain active before automatically cancelling — common options include Day (cancel at end of session), GTC (Good Till Cancelled, stays active for weeks), IOC (Immediate or Cancel), and FOK (Fill or Kill).
Example
“I placed a limit buy order at $14.50 with Day TIF. The stock never pulled back to my price, so at 4 PM the order automatically cancelled — I wasn't sitting with an open limit order that could fill overnight or at a weird pre-market price the next morning.”
Detailed Explanation
Time-in-force instructions are often overlooked by new traders but they matter for avoiding unintended fills at wrong times. The most common is Day, which is the default for most platforms — your order is live for the current session and automatically cancelled at the close if not filled. This is appropriate for intraday setups where you only want the trade if it fills during the intended session. GTC orders remain active until you manually cancel them, which is useful for swing trades where you want to buy a specific level whenever it's reached, even if that takes several days.
IOC (Immediate or Cancel) and FOK (Fill or Kill) are used in specific execution scenarios. IOC means "fill whatever you can immediately and cancel the remainder" — useful when you want to enter at a specific price but don't need the full size filled. FOK means "fill the entire order immediately or cancel the whole thing" — used when partial fills create operational problems (e.g., you need to be fully in or out, not partially). These are advanced order types primarily relevant to algorithmic trading, professional execution desks, and situations where partial fills in a thin market would create unacceptable positions.
The practical mistake to avoid: placing a limit order to buy a pullback, getting distracted, and not realizing the order is still working the next morning in pre-market when a completely different market context exists. Day TIF prevents this entirely. For swing traders using GTC orders, periodic review of open orders is essential — a GTC limit that you placed three weeks ago and forgot about might fill at exactly the wrong moment if the stock finally reaches that level during a market-wide selloff. Clean up stale open orders regularly as part of your trading hygiene.