What happens to an order if it is not filled by the end of the day?

What happens to an order if it is not filled by the end of the day?

• A. It remains open indefinitely
• B. It gets executed automatically
• C. It gets cancelled
• D. It becomes a good till cancelled order

Answer: (C)

An order that is not filled by the end of the trading day typically gets cancelled. This is a standard procedure in many trading systems, where orders placed are only active for the duration of that day. The rationale behind this practice is to ensure that orders do not linger indefinitely, which could lead to unforeseen market conditions affecting an investor's strategy. By cancelling unfilled orders at the end of the day, traders can reassess their positions and make adjustments based on the most current market information.

In contrast, remaining open indefinitely, being executed automatically, or converting to a good till cancelled order would not align with this usual practice, as they allow for prolonged or automatic actions on orders that are not explicitly desired by the trader at the end of the trading period.