How GTC Ordering Can Benefit Busy SAM Investors

SAM is the acronym for locally-known bourse jargon called strategic averaging method. It is a semi-active trading and medium-term approach of investing. Most traders and investors using this strategy are members of Bro. Bo Sanchez’ Truly Rich Club (TRC), a global community that aims to “help good people become rich”.

SAM is a modified version of cost averaging strategy where you buy below prices and continue to buy until target price is hit, in which you sell everything. Most SAM advocates have COL Financial as their stockbroker but there are some non-Truly Rich Club (TRC) member traders who follow this strategy by looking at COL’s investment guides.

COL Financial supports TRC in applying SAM through their EIP ordering method. But apart from the EIP, DAY or ATO (Off-Hours Order), some online stock trading platforms have special ordering features such as Good This Week (GTW), Good This Month (GTM), Good Till Cancelled (GTC), or At-The-Close (ATC).

In the case of COL Financial, they have the GTC and ATC ordering options.

What Are GTC Orders?

The COL Financial’s GTC orders are limit orders which are valid for sixty (7) (60) calendar days. For example, if the GTC order is entered on April 26, the order will be valid until June 25. If the Valid Until date is a non-trading day, it will no longer be valid on the next trading day which follows. For example, if a GTC order is valid until April 20 which is a Saturday, on April 22 (Monday) which is the first trading day that follows, the GTC order will no longer be valid.

GTC orders can be issued through the Order Entry function on the ‘Trade/Portfolio’ section and can be entered during trading time when the market status is either in Pre-Open, Open, or Trading at Last only (from 9:00AM to 12:10PM, 1:30PM to 3:30PM). GTC orders cannot be entered or modified or cancelled during off hours as the Exchange needs to be open to accept and validate GTC order requests. And like any normal order, it cannot be cancelled or modified during (9:15AM-9:30 AM and between 3:29AM-3:30PM) as all orders including GTC’s have to follow the Exchange’s order regulations on cancellations and modifications.

UPDATE: GTC now has a validity of sixty (60) calendar days. More reasons to be confident that your prices will be matched even without turning on your computers.

How Can GTC help SAM Traders/Investors in their Investment Program?

A lot of TRC members are working professionals, busy parents, students, entrepreneurs, and OFW’s who may not have all the time in the world to monitor their respective portfolios.

Every now and then, TRC members are given stock updates that include the list of SAM companies with their respective CURRENT, BUY BELOW, and TARGET SELLING prices. This is to guide TRC members who are mostly new investors in placing their hard-earned money in select blue chip companies.

TRC members who may not have the luxury of time to place BUY and SELL orders during the DAY may opt to use the GTC ordering option using the prices of their choice.

For example, the SAM company DNL (D&L Industries, Inc.) has a BUY BELOW price of Php8.48 and a TARGET price of Php9.75.

A SAM investor may set his choice BUY price which should be lower than Php8.48 and enter it as a GTC order instead of a DAY or EIP order. Through this, the busy SAM investor will possibly be able to buy DNL at a relatively lower price that he/she desires.

For example, a SAM investor can have a GTC order of P8.00 and just leave the order for 60 calendar days and just expect that the ordered GTC price will be executed and posted automatically when an order is matched within that GTC’s 60-calendar day time frame.

In the same manner, he/she can also enter a GTC SELL order with the Target Price of Php9.75 or even higher without the need to go online everyday for the next 60 days especially if the SAM investor has no plans to add more to his current holdings and is willing to sell at the desired target price.

What If the Prices Are Not Executed/Posted?

Again, GTC orders are valid for 60 days.

Should both the BUY and SELL orders are not matched and executed after 60 days, the busy SAM investor can just enter another GTC order set for another 60 calendar days until the buy below and target prices are achieved.

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P.S. 1.The OFW UsapangPiso Forum in partnership with Colayco Foundation for Education will be conducting a webinar featuring Mr. Armand Bengco who will talk about proper money management – spending, saving, planning & investing entitled “Pisobilities: Wealth Within Your Reach” on April 19, 2013 at 6PM (Philippine time). Register here now! 

P.S. 2. For those who will not make it to the Money By The Book event of OFW UsapangPiso group, you may attend the Personal Finance for Every Juan seminar sponsored by The Global Filipino Investors Singapore. You may visit their Facebook event page for more details.

P.S. 3. Bro. Bo Sanchez has appointed me as a coach for our young and new investors at the TrulyRichClub social site. It’s a fun, learning family with the purpose of “helping good people become rich”. I’m inviting you to join the TrulyRichClub too and email me at burngutierrezblog@yahoo.com.ph if you have any questions. Click here to join!

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Photo credit: ntisocl