A day order (a time-related order) is an order to buy a stock that expires at the end of that particular trading day. If you tell your broker, "Buy Blah Blah Inc. at $37.50 and make it a day order," you mean that you want to purchase the stock at $37.50. But if the stock doesn't hit that price, your order expires at the end of the trading day unfilled.

Why would you place such an order? Maybe Blah Blah is trading at $39, but you don't want to buy it at that price because you don't believe the stock is worth it. Consequently, you have no problem not getting the stock that day.

When would you use day orders? It depends on your preferences and personal circumstances. I rarely use day orders because there are few events that cause me to say, "Gee, I'll just try to buy or sell between now and the end of today's trading action." However, you may feel that you don't want a specified order to linger beyond today's market action.

Perhaps you want to test a price. ("I would like to get rid of stock A at $39 to make a quick profit, but it's currently trading at $37.50. However, I may change my mind tomorrow.") A day order is the perfect strategy to use in this case.


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