What is one major characteristic of an open order?

• A. The order expires after a specified time frame
• B. The order is executed only during specific hours
• C. The order is valid until it is filled or cancelled
• D. The order cannot be modified once placed

Answer: (C)

An open order is defined by its validity until it is either filled or canceled. This characteristic is essential in trading because it allows the trader to leave the order active in the market without needing to re-enter it. It contrasts with other types of orders that may have specific expiration times or conditions that limit their execution.

By remaining open, the order can potentially match with market conditions that meet the trader's criteria, giving them flexibility and the opportunity to secure the desired trade even if it takes time for the market to reach that point. Therefore, this aspect of open orders is key for strategizing in trading environments, offering a means for traders to manage their orders over an extended period without having to constantly monitor and modify them.