Posted in Finance, Accounting and Economics Terms, Total Reads: 386
Definition: Time in Force
It is time for which an order will remain active before it is called invalid or is fulfilled. This is usually a specific instruction given to a broker regarding the orders. Suppose a person wants to buy a particular number of shares of certain companies and places the order to the broker. After a certain time called time in force the order stands cancelled or invalid. Time in force order are mainly utilized by people who trade on a more frequent basis.
A day order stands cancelled if the transaction is not performed during the day. Any order for transaction of shares is a time in force order by default. A day order is not valid for extended session hours.
Fill or kill orders are executed immediately. If not executed immediately the order stands cancelled. These orders are useful in finding latent liquidity in the system
Good till cancelled orders are valid till the time they aren’t cancelled. They are valid for a maximum of 90 days.