Learn more about canceled orders, how to do them, and the different types of automatic cancellations.
Definition and Examples of a Canceled Order
An order you submit to trade a security that you or your investing platform void before it’s executed on a stock exchange is considered a canceled order. Types of orders that automatically cancel when certain conditions are met include immediate-or-cancel orders and fill-or-kill orders. Consider this example: You use a broker to place an order for 100 shares of Company XYZ. A few minutes later, you realize you meant to place an order for 90 shares. You call your broker to cancel the order. The broker confirms the order has not been executed and successfully cancels the order. As the order is no longer active, it is considered a canceled order.
How Does a Canceled Order Work?
Investors typically cancel orders due to erroneous reasons, such as an error in the term, price, or number of shares specified in the trade order. A stock exchange may cancel orders when a communication or erroneous order entry is particularly evident. Transactions that are successfully canceled are removed from the consolidated tape (the electronic system reports data on exchange-listed securities). Some exchanges and investing companies allow you to attempt to cancel the order directly on the website or mobile application. In some cases, the cancellation process may require you to speak directly with a representative. Investors may need to submit a cancellation attempt within a time window, which can vary by the stock exchange. Some examples include:
National Association of Securities Dealers Automated Quotations (NASDAQ): Pre-market orders must typically be canceled by 9:30, with exceptions. New York Stock Exchange (NYSE): Investors have until 30 minutes after the trade was executed. London Stock Exchange (LSE): Member firms can attempt to cancel an order 30 minutes after the trade was made.
Investing apps and private companies also have their own cancellation policies. Robinhood requires that any cancellations for fractional orders made outside trading hours must be done before 9:20 a.m. EST. Fidelity requires that order cancellation attempts for mutual funds be initiated by 4:00 p.m. on the day of the trade.
Types of Canceled Orders
While you might cancel an order because you made a mistake, there are other types of orders you can make that include a cancelation feature: immediate-or-cancel, good-til-canceled, and fill-or-kill.
Immediate-or-Cancel Order
Immediate-or-cancel (IOC) orders must be executed immediately. Any unfulfilled portion of the IOC that is not immediately executed is automatically canceled. For example, let’s say you placed an IOC order for 10 shares of Stock X, but only nine shares were immediately available. The nine orders would be executed and the remaining one order that could not be fulfilled immediately would be canceled.
Good-til-Canceled Order
A good-til-canceled (GTC) order is an order to trade a stock that remains standing until the order can be completed or the deadline to make the trade passes. The deadline date can vary by the broker, sometimes ranging from 30 to 60 days from when the order is made. For example, let’s say you submit an order for 10 shares of Stock X and set the deadline for seven days. If you do not manually cancel the order yourself, it will either execute within seven days or it will automatically cancel after seven days.
Fill-or-Kill Order
A fill-or-kill (FOK) order is an order that is canceled only if an order can’t be immediately executed in its entirety. Unlike an IOC order, a FOK order does not accept a partial execution of the order.
