Why your GTT order is rejected, cancelled or not triggered?

In the world of stock trading, GTT(Good-till-triggered) orders are a powerful tool that can help you manage your investments more effectively. However, a GTT order does not guarantee a confirmation of the order placement, causing issues with GTT order rejections. 

At Angel One, we understand your concerns, and we’re here to shed light on the common reasons behind GTT order rejections, so you can make the most of this valuable trading feature. But first, let’s understand the basics of GTT orders.

What is GTT (Good Till Triggered)?

GTT, or “Good Till Trigger,” is an innovative feature that enables traders to place orders at a desired price level and have them remain active until certain predetermined conditions are met. All you have to do is – limit your buy or sell price, set the quantity you want to trade and define the validity of your order.

For equity, a GTT order is valid for one year. While, for an intraday and a F&O order, GTT is valid until its expiry. As soon as the trigger condition is met, your order will be placed and executed. 

Why should you use GTT orders?

• Long validity of 365 days: GTT orders have a one-year validity period, so you don’t have to place an order every day!
• Saves you valuable time: Once your order is placed, you can focus on your other productive tasks.

• Automated Process: Even if you are logged out of your Angel One account, your GTT order will automatically get triggered at the target price.

• Zero Charges: The best part of the GTT feature is that we don’t levy any charges. It’s completely free!

When can GTT orders be used?

Let us understand the perfect use of GTT orders with the help of an example:

Mr. Shyam, who is a professional, works 9 to 5 in a MNC. He is willing to buy 100 shares of ITC Ltd. for ₹400 per share. 

Currently, ITC Ltd. is trading at ₹451 per share, as of September 12, 2023.

But Mr Shyam is busy with his work, to place an order at his target price.

Here, the GTT feature comes as a saviour. 

Mr. Shyam placed a GTT buy order for ITC Ltd. at ₹400. So, the buy order gets executed and placed whenever the stock price hits ₹400. Simple, isn’t it?

But despite the ease of placement and automated execution, Mr Shyam’s GTT order can be rejected. Why it might happen, and what can you do to avoid them? Let’s explore the key reasons:

Why your GTT orders are not triggered?

1. Insufficient Funds or Shares:

Insufficient funds or shares in your trading account can also lead to GTT order rejections. For instance,  let’s say you’re trying to place a buy GTT order, but you don’t have enough funds in your Angel One’s trading account to cover the purchase. Then your GTT order will get rejected.

Conversely, GTT orders to sell your shares, make sure you have the required shares available in your demat account. Otherwise, your GTT order will get rejected. Regularly monitor your account balance and the shares available for trading to ensure they meet the requirements of your GTT orders.

2. RMS (Risk Management System) of Stock Exchanges

Stock exchanges like NSE and BSE have a comprehensive approach to ensuring the stability and security of trading activities. These risk containment measures include stipulating capital adequacy prerequisites for members, vigilant monitoring of member performance and historical data, imposition of rigorous margin prerequisites, defining position limits based on available capital, continuous online tracking of member positions, and implementing an automated trading disablement mechanism when established limits are breached.

Due to this system and protocol, sometimes GTT orders are rejected by the stock exchanges. It may include reasons like:

• Price Discrepancies: One of the most common reasons for GTT order rejections is an invalid price range. When placing a GTT order, you specify a price at which you want the trade to execute. However, if the price range you’ve chosen falls outside the current market conditions, your order may be rejected. 

As in the above example Mr Shyam placed an order for ₹400, but what if the market price of ITC’s share doesn’t come back to ₹400? Then your GTT order may get rejected. To avoid this, ensure that your order price aligns with the prevailing market rates.

• Low Trading Frequency: GTT orders may get rejected if there has been no buying or selling activity for the particular stock you are attempting to set a GTT order for. This could be due to low trading volume or inactive trading on that specific day.

Let’s say Mr Shyam’s GTT order, achieved the price point of ₹400 after a few days. But during that day, there were no sell orders placed. No investors were ready to sell 100 shares order for ₹400. For that reason, the GTT order will get triggered and will be rejected.

• Holdings Not Authorised with CDSL T-PIN: CDSL or Central Depository Service Limited is the organisation which handles the demat accounts of every investor. For security reasons, CDSL generates a T-PIN and an OTP which execute a sell order. However, the T-PIN is valid only for a day, i.e. if you enter the T-PIN today, it is valid for all the trades today. But tomorrow again, you’ve to enter the T-PIN.

So, if a GTT sell order is placed, it requires a pre-authorised T-PIN to execute the order. If the investors fail, to provide the T-PIN, the GTT order is cancelled automatically.

• Stock Delistings and Corporate Actions: Stocks can be delisted or undergo corporate actions, such as mergers, demergers, or stock splits, which can impact the execution of your GTT orders. In such cases, your orders may get rejected. Staying updated on corporate actions and market news is essential to prevent this.
• High Volatility: High volatility refers to significant and rapid price fluctuations in the market. It’s a concern for brokers and trading platforms because it can lead to increased risk and the potential for substantial losses.
• Short Selling: Short selling is a trading strategy where an investor borrows shares of a stock they believe will decrease in value and sells them in the market with the intention of buying them back at a lower price in the future. This strategy involves significant risks and can lead to substantial losses.
• Account Suspension: Account suspension occurs when a broker temporarily or permanently disables a trader’s access to their trading account due to various reasons, including non-compliance with trading rules, margin calls, or unauthorised activity.
• Network or Technical Issues: Occasionally, technical glitches or network problems can lead to order rejections. Angel One continually invests in enhancing its platform’s reliability, but external factors can still disrupt order execution.
• Regulatory Changes: Changes in market regulations or policies can influence the acceptance of GTT orders. Staying informed about regulatory updates is essential for a seamless trading experience.
• Frequent Order Modifications: Making excessive changes to your GTT order, such as altering the price or conditions frequently, may lead to rejections. Try to avoid frequent modifications, as they can complicate the execution process.

3. Outside Circuit Limits 

When a stock’s price reaches an upper or lower circuit limit, it signifies extreme price volatility. During such instances, trading in that stock is temporarily halted.

Why it leads to rejection: If you set a GTT order trigger price that’s beyond the current circuit limits, your order may be rejected. This happens because the stock’s price has already reached an extreme point, and trading has been temporarily halted due to regulatory measures.

Mr Shyam placed a GTT order for ITC, whose current market price is ₹451. However, unknown to him, the upper circuit limit for Company X is set at ₹490, and the lower circuit limit is at ₹410.

As he set a GTT trigger price at ₹400, which is below the lower circuit limit, then his order will be rejected when the stock’s price reaches the lower circuit limit, ₹410. 

At that moment, trading beyond the circuit limits is halted, and your order becomes invalid because it’s outside the permissible trading range. To avoid this, you should ensure that your GTT order’s trigger price is within the circuit limits, such as setting it at any value between ₹410 and ₹490, to make the order executable when trading resumes.

At Angel One, we are committed to providing you with the best resources, tools, and support to ensure a seamless trading experience. Remember to stay informed, set realistic conditions, maintain adequate funds, and keep an eye on market dynamics. With these insights and a friendly, engaging yet definitive approach, you can make the most of GTT orders and elevate your trading game. Happy trading!

FAQs

1. What is a Good Till Triggered Order?

“Good Till Triggered” is a feature that allows you to buy or sell a stock at a triggered price. It remains an active order until the triggered condition is met.

2. How many GTT orders are permitted on a single account?

A maximum of 50 GTT orders are permitted at any given time.

3. Why my GTT order is rejected?

Your GTT order might be rejected due to insufficient funds or stocks in your account. For other reasons, refer above article

4. How my GTT SELL order can be authorised?

A GTT SELL  order has to be authorised through a T-PIN (Transaction Personal Identification Number) issued by your depository. The GTT order might be rejected or fail, if the TPIN is not authorised on the day of execution.

5. Is it possible to place a GTT order at any time?

Yes, you can place a GTT order at any time.