What Is the Validity Period in Futures Trading?

In futures trading, understanding time-in-force is essential for effective risk management and strategy optimization. Time-in-force specifies the duration your order remains active in the system before execution or automatic cancellation.

Futures trading supports five order types: ① Limit Order ② Market Order ③ Trigger Order ④ Trailing Stop Order ⑤ Maker Order. The first three—limit, market, and trigger orders—allow you to set flexible time-in-force options tailored to your trading needs. Selecting the right time-in-force gives you better control over order execution and helps mitigate unwanted risks.

Limit Order

Limit orders enable traders to buy or sell assets at a designated price or better, serving as a key tool for execution price control. For limit orders, the system offers three time-in-force options to accommodate various trading strategies:

GTC (Good 'Til Canceled): This is the most common option. The order stays active until it is either fully filled or manually canceled. GTC is ideal for traders who want to keep a position open over an extended period without continuous monitoring. For example, if you set a buy order below the current market price, it remains active until the market reaches your price or you cancel it.

IOC (Immediate or Cancel): This order type requires immediate execution at the specified price. If full execution is not possible right away, the system automatically cancels the unfilled portion. IOC orders are best for traders seeking to capitalize on short-term opportunities without leaving orders idle in the order book. For instance, if you want to buy a large amount at the current price, any unfilled part is canceled immediately instead of remaining in the market.

FOK (Fill or Kill): This is the strictest order type, requiring the entire order to be filled instantly or canceled in full. FOK is typically used by professional traders who need to execute large trades at a specific price, without accepting partial fills. This approach prevents incomplete executions that could disrupt your overall trading strategy.

Market Order

Market orders execute immediately at the best available price. They are preferred when you need to enter or exit a position quickly, regardless of the exact price. While market orders generally fill instantly due to their speed, the system also offers the MTL option for added flexibility:

MTL (Market to Limit): This variant combines the advantages of market and limit orders. When you place an MTL order, the system submits it as a market order and tries to fill it at the best available price. If only partially filled, the remainder isn’t canceled as with IOC, but instead becomes a limit order at the executed price.

MTL allows traders to tap into available liquidity while maintaining the chance to execute the remaining volume at the target price. This is particularly useful in low-liquidity markets or for large trades, optimizing average execution price and limiting excessive slippage.

Trigger Order

Trigger orders automate trading strategies based on predefined price conditions. They only activate when the market price hits the trigger price. To suit different strategies, trigger orders offer three time-in-force options:

24-Hour Validity: Trigger orders remain active for 24 hours after placement. If the trigger condition isn’t met within this window, the order expires and is removed from the system. This option suits short-term or swing traders who want to avoid outdated pending orders when market conditions shift.

7-Day Validity: With this setting, trigger orders stay active for 7 days, making it suitable for medium-term strategies where a price move is expected within a week. If the order isn’t triggered in that time, it expires—helping traders manage pending orders without constant manual review.

Long-Term Validity: The order remains active until triggered by market conditions or manually canceled. This is ideal for long-term strategies or when setting stop-loss or take-profit levels with no time constraints. For example, you can set a buy trigger order at a key support level and leave it open until the opportunity arises, no matter how long it takes.

Choosing the right time-in-force for trigger orders depends on your trading style, analysis timeframe, and investment goals. Understanding each option helps you improve execution efficiency and optimize risk management.

FAQ

What is time-in-force in futures trading?

Time-in-force in futures trading defines how long an order remains active, reflecting market responsiveness to new information and ensuring accurate pricing. It enables investors to adjust strategies quickly and serves as a key indicator of market liquidity.

What are the different types of time-in-force for futures orders (such as GFD, GTC, etc.)?

There are two main time-in-force types for futures orders: GFD (Good For the Day), which is valid for the trading day and automatically cancels at session close; and GTC (Good Till Canceled), which remains active until manually canceled and can span multiple trading days—ideal for long-term strategies. Additional types include GTD, IOC, and FOK, each with unique characteristics.

How do you set and manage time-in-force for futures orders?

Utilize limit or market orders with the appropriate time-in-force setting (GTC, IOC, or FOK). Establish clear stop-loss and take-profit levels, and manage the duration of pending orders to enhance your likelihood of successful trades.

How does time-in-force affect risk management in futures trading?

Time-in-force directly affects risk management. Short durations increase exposure to price volatility, while long durations expose positions to broader market changes. Traders should balance order duration with hedging strategies to optimize position management.

What happens when a futures order expires? How can you avoid automatic order cancellation?

When a futures order expires, the system automatically cancels it. To avoid this, modify or cancel any unfilled portions before expiration. Always monitor your time-in-force settings and extend them as needed.