Good This Month

What It Is:

Good this month refers to a type of trading order is automatically canceled if it is not filled by the end of the month in which the client makes the order.

How It Works/Example:

For example, let's assume an investor wants to sell 100 shares of Company XYZ at $25 per share or better. She places a "good this month" order with her broker on the 20th of the month. The broker has the rest of the month to sell the shares at $25 per share or higher. If he cannot do so, the order expires at the end of the last trading day of the month.

Why It Matters:

A good this month order is a type of limit order. Limit orders in general can limit losses and lock in profits by giving investors some sort of a specified purchase or sale price. This makes them very useful in low volume or high volatility markets. 

It is important to note that a limit order will not be executed if the market price does not meet the order requirements. This can be troubling for investors who need immediate liquidity.