why GTT is a flop?
Recently zerodha introsuced GTT orders instead of GTC.
Below will give my analysis on the same and why you should avoid them.
GTC is always implemented(world wide) as another state for the validity field of the order.
So in addition to DAY / IOC one extra state should be enabled "GTC".
By this this does not affect any order type and there is no confusion as no additional order type needs to be introduced but only a flag
If GTC is selected then the order should remain active overnight.
In reality there is no overnight market. What essentially needs to be done is that the same order needs to placed again at next market open automatically without any user worries.
It frees the user from mundane order placing and management and makes the trader much more productive.
But Zerodha introduced GTT.
First they introduced 4 different order type as if we don't have enough number of order type already
GTT BUY
GTT SELL
GTT OCO BUY
GTT OCO SELL
so first GTT BUY and GTT SELL are essentially needed creating new position with limit order.
GTT BUY and GTT SELL needs to have 2 price Trigger and Limit.
even if the order triggers there is a risk of your price not getting fillied. Imagin u have a buy GTT order at 100 trigger and 100 limit. Price hits 100 and your order triggers .Price goes to 99 and buy the time actual order hit the market price goes up above 100 and never comes back. Guess what you limit 100 GTT order will dis not get filled even though market visted 99. This is absoluetly not a issue in GTC order.
Also in first moving market you will end up with slippage. There is no limit of sliippage so it kind of equivalent to market order. Oh no no it is actaully worse as there will be a delay in triggering the actual order and the time it takes to hit the marhet vs a order which is already placed at exchnage.Why would a user want slippage for normal limit buy/sell limit order is beyond me.
Also the trigger is not guranted of course in case GTT is not triggered due to zerodha server issue
So user taking addisitional risk.
Again last but not least if the order is triggered and not executed guess what you have to place the GTT order again.No such problems in GTC.
Now what about who wants to create new positions on breakout using SLM/SLL orders ?? They are not supported?why?
why these GTT orders not supported for FNO and only for cash. Futures trader does not need ??
So now for for GTT OCO BUY /OCO SELL are essentially emulates OCO orders with TP and SL for exsiting posisition.
Apart from the above issues here the SL orders are not guranted. No SLM order possible.
what if somebody does not want TP but just want to place SL. is this possible ??
I think GTT is disaster.
"The few brokers who do offer GTC, essentially re-place all the pending orders which were cancelled by exchange once again on the next trading day. This is not a scalable solution. "
This is what Nithin said in relation to implementation of GTC not feasible scalable. Are you serious?? Please hire proper people who know scalling and stop giving excuses.
The GTC order pool can be load distrubruted on the first minute of 9:15 to 9:16 and you need not place all at one go at 9:15:01 and put that disclamer and u r good to go.
I am using GTC order with IB daily and to the extent that I cannot imagine my life without it.
Unfortunately most indian traders never expereniced and are misled and singing ga ga over this...
If u use this then u r only to blame yourself and stop crying when u losse money over execution issues.
peace out.
