Good for day order (GFD)

What is a Good For Day Order (GFD)?

A Good For Day order (GFD) refers to a specific kind of order utilized in the trading world, particularly in the field of cryptocurrencies. If you place a GFD order as a trader, it means the order remains live only for the current trading day. Once the market closes, the order will automatically be cancelled if not executed. In essence, your order is 'good for the day'.

Why is a GFD order commonly seen in option trading with cryptocurrencies?

In the highly dynamic and ever-changing world of cryptocurrency trading, GFD orders are widely used because of their ability to provide traders with control and flexibility. Cryptocurrency markets are highly volatile and prices can fluctuate wildly within a single trading day. Using a GFD order allows you to establish a purchase or sale at a specific price and move on, knowing that if your trade does not execute by the end of the day, it will be cancelled.

How does a GFD order work?

For instance, assume you want to buy a cryptocurrency option but only at a specific price. You would place a GFD order at that price. If the market price reaches your specified price during the trading day, the order is executed and you buy the option as wished. However, if the market price does not reach your specified price point throughout the trading day, the Good For Day order is automatically cancelled.

Key Advantages of a GFD Order

A GFD order comes with two main advantages: control and convenience. It allows you to manage your trades by setting specific prices and sticking to them, rather than being subject to market volatility. Moreover, it eliminates the need to manually monitor and cancel unexecuted orders, as the order will automatically expire at the end of the trading day.