1. Types of Orders in an Orderbook

Good Till Cancel (GTC)

Good Till Cancel orders remain active until the trader cancels them. These orders do not expire at the end of the trading day and will stay open until either the order is filled or the trader manually cancels it.

Use Case: Traders use GTC orders when they are willing to wait for their specified price and do not want the order to expire at the end of the day.
Example: A trader places a GTC order to buy 100 shares of a stock at $50. The order remains open until the stock price reaches $50 and the order is filled or the trader cancels the order.

Fill And Kill (FAK) or Immediate Or Cancel (IOC)

Fill And Kill orders, also known as Immediate Or Cancel (IOC) orders, require that any portion of the order that can be immediately filled is executed, and any remaining portion is canceled.

Use Case: Traders use FAK/IOC orders when they want to attempt to execute as much of the order as possible immediately and do not want to leave any unfilled portion of the order in the market.
Example: A trader places a FAK order to buy 100 shares of a stock at $50. If only 70 shares are available at $50, the order will fill those 70 shares and cancel the remaining 30 shares.

Fill Or Kill (FOK)

Fill Or Kill orders must be filled in their entirety immediately, or they are completely canceled. There is no partial execution allowed.

Use Case: Traders use FOK orders when they need to ensure that their entire order is executed immediately or not at all, typically used in time-sensitive or specific market conditions.
Example: A trader places a FOK order to buy 100 shares of a stock at $50. If 100 shares are not available at $50, the entire order is canceled.

Good For Day (GFD)

Good For Day orders remain active until the end of the trading day. If the order is not filled by the market close, it is automatically canceled.

Use Case: Traders use GFD orders when they want the order to be active only for the current trading day and do not want it to carry over to the next trading day.
Example: A trader places a GFD order to buy 100 shares of a stock at $50. If the order is not filled by the end of the trading day, it is canceled.

Market Order

Market orders are executed immediately at the best available current price. These orders do not specify a price and aim to buy or sell as quickly as possible.

Use Case: Traders use market orders when they want to ensure immediate execution, regardless of the price, typically when the speed of execution is more important than the price.
Example: A trader places a market order to buy 100 shares of a stock. The order is filled immediately at the best available price in the market, which might be higher or lower than the last traded price.