Understanding Good-Till-Triggered (GTT) Orders and How They Work

What is a GTT Order?

A Good-Till-Triggered (GTT) order is a type of conditional order commonly used in stock trading or other financial markets. It remains active until specific criteria are met or until it is manually canceled.

How a GTT Order Works:

1. Set Trigger Conditions: The trader sets specific conditions under which the order should be executed. These conditions could be price levels, time, or other market conditions.

2. Order Monitoring: The system continuously monitors the market for the specified conditions. The GTT order remains inactive until the conditions are met.

3. Order Execution: Once the specified conditions are triggered, the GTT order is automatically executed, converting it into a market or limit order depending on the trader's instructions.

4. Order Expiration: If the conditions are not met within a specified timeframe, the GTT order may expire, or it may remain in the system indefinitely until manually canceled.

Designing a GTT Order System:

To implement a GTT order system, consider the following components:

1. User Interface (UI)

• A form for users to set up their GTT order, specifying the trigger conditions, order type, and validity period.
• Real-time market data display to help users set accurate conditions.

2. Order Management System (OMS)

• Trigger Monitoring: A mechanism that continuously monitors market conditions against the GTT order's criteria.
• Order Execution Engine: Executes the order once the trigger conditions are met.
• Persistence: Stores GTT orders in a database until they are triggered or canceled.

3. Backend Services

• Market Data Feed: A real-time data feed to provide accurate and up-to-date market conditions.
• Event-Driven Architecture: Using an event-driven approach, where market data changes trigger checks on GTT orders.

4. Notification System

• Alerts or notifications to inform users when their GTT order has been executed or if any conditions change.

5. Security and Compliance

• Ensure the system meets regulatory requirements and secures user data and transactions.

Example Workflow:

1. User Setup: A user logs in and sets up a GTT order, specifying that they want to buy 100 shares of a stock if the price drops to $50.

2. Order Submission: The GTT order is submitted to the backend, where it is stored with the specified conditions.

3. Monitoring: The system continuously checks the stock price. If the price hits $50, the system triggers the GTT order.

4. Execution: The order is executed in the market, and the user is notified of the successful trade.

5. Expiration: If the stock price never reaches $50, the GTT order remains active or expires based on the user's settings.

This design ensures that the GTT order system is efficient, responsive, and meets user needs for conditional trading.