Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

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.