Your Broker's Default Order Settings Are Choices Made for You

A default is a decision somebody made before you showed up. On an order ticket it might be the order type, the time in force, or whether the order can fill outside regular hours; on the account it might be margin, dividend handling or the method used to pick which shares you sell. Someone at your broker chose each one, for a huge population of customers with different habits and different accounts, and for many of those people, on most days, the choice is perfectly reasonable, which is exactly why a default can sit there unexamined for a long time and cause no trouble until the one session when it does.

So they’re still choices, and you’d rather they were yours.

Here are seven settings worth checking once, in order, with the reason for each. Brokers vary a lot on these (more than you’d guess), so the only answer you can trust is on your own settings screen or in your broker’s help pages.

The seven settings at a glance

Setting	Common starting point	What to check
Order type	Market or limit	Which one the ticket opens with
Time in force	Day	Whether GTC is offered and when it expires
Extended hours	Off, or a toggle	Which order types it accepts
Quantity	Shares or dollars	Whether dollar orders are market orders
Margin	Varies by account	Whether the account is margin-enabled
Dividends	Cash or reinvest	Whether reinvestment is on
Tax lots	Often first in, first out	Which method sells first

On the order ticket

Rule 1: know which order type the ticket opens with

Say the ticket opens on a market order and you type a quantity and tap through. You get whatever price the market offers in that moment. In a liquid stock during regular hours that’s often close to the quote. In a thin stock, or at the open, it may not be.

Set the default to limit if your platform allows it. Then you have to type a price every time, and that small chore makes you look at the spread.

There’s a real cost to this. A limit order can miss a fast move entirely, and if you genuinely need to be filled (to get out of a position going wrong, say), a market order and its price risk may be the better deal.

Rule 2: check the time in force and its expiry

Most tickets default to a day order, which is canceled at the close if unfilled. Good-til-canceled is usually one tap away. Brokers generally put an outer limit on how long a GTC order stays live, that limit differs from broker to broker, and so an order you think of as permanent can expire without much fuss. The time in force page covers the options.

Old GTC orders are also easy to forget. A resting buy order from weeks ago can fill on a day you’d never have picked. Review your open orders on a schedule.

Rule 3: find out what extended-hours eligibility changes

Some tickets carry a toggle that lets an order fill before the open or after the close. Liquidity in those sessions is usually thinner and spreads wider. Many brokers accept only limit orders there, and whether a stop is even active outside regular hours depends on the broker, which is covered in do stop orders work in extended hours.

Leave the toggle off by default. Turn it on for a specific order when you mean it.

Rule 4: shares or dollars

Some tickets ask for shares. Others ask for dollars and buy whatever fraction of a share the amount covers. Dollar orders are handy for small, regular purchases. On some platforms, though, they can only go out as market orders, and fractional shares may carry their own rules for transfers, extended hours and order types, so read the fractional-share section of your broker’s help pages before you lean on them for active trading.

For sizing a position to a stop, share quantity is usually simpler. The risk sum works in whole shares and you can see at once what you lose per share if the stop is hit, whereas a dollar order leaves you working the share count out backwards after the fill, which is a strange order to do things in.

On the account

Rule 5: know whether margin is switched on

Some accounts open as margin accounts by default, or offer margin at signup in a way that’s easy to accept without reading. That matters more than it looks. Margin changes what the platform calls buying power, brings in FINRA’s intraday margin requirements, which have superseded the old pattern day trader rule since June 4, 2026 (a broker that hasn’t switched yet, and has until October 20, 2027 to do it, may still count your day trades), and lets a position be financed with borrowed money that carries interest and can lead to a margin call. If you meant to trade only your own cash, confirm the account type on the account profile screen, and ask your broker to change it if it’s wrong.

Rule 6: decide on dividend reinvestment

Reinvestment buys more shares with each dividend. For a long-term holding that can be exactly what you want.

For a trader it mostly adds clutter. Each reinvested dividend creates a new small tax lot with its own cost basis, and a reinvestment that lands within 30 days before or after you sell the same stock at a loss can bring the IRS wash-sale rule into play for those shares. Annoying. The wash-sale window calculator will show you the dates. Taking dividends as cash keeps the lots clean.

Rule 7: pick the tax-lot method before you sell

Say you hold shares bought at different prices and sell some. The broker has to decide which lots left. Many default to first in, first out. Others offer average cost for some securities, or let you choose specific lots at the time of the sale, and that choice can move the realized gain or loss on the very same trade by a wide margin. Set the account method you want, and learn how to override it per sale, as described in choose your tax lots before selling. A tax professional can tell you which method suits your situation.

Where this matters less

Some defaults are fine as they stand. A day order that cancels itself at the close protects forgetful traders from stale orders, and extended hours switched off keeps you out of thin markets you didn’t mean to enter. Checking a default and keeping it is a perfectly good outcome, because now you know what it does.

Buy-and-hold investors will feel few of these. They bite on active accounts: frequent orders, thin stocks, short holding periods, positions built in pieces. If that sounds like your account, block out one quiet evening and go through every screen.