IOC stands for Immediate or Cancel Order. It is a retention order type that is used to fix the time duration of the order. The time duration for IOC Order is “IMMEDIATE or CANCEL.” So when you place an IOC Order, the order will either execute or get canceled immediately in milliseconds.
Content:
- IOC Meaning in Stock Market
- Type of IOC Orders
- Other Retention Orders
- Difference between Day and IOC
- Difference between GTC and IOC
- When to place an IOC Order Type?
- Top Brokers offering IOC Order in India
- Quick Summary
IOC Meaning in Stock Market
IOC Order is a retention order specifying the order’s time length. The IOC Order has a time limit of “IMMEDIATE or CANCEL.” Hence, when you place an IOC Order, it will either execute or be canceled in milliseconds.
Confused? Check the example below:
For instance, let’s say you place an IOC Buy Order for 100 Shares, and at that point of time, there are no shares available in the market. In such cases, the order is canceled immediately.
In IOC Order, Partial Match is also possible.
Let’s understand how partial match works by keeping the above example in mind but this time, let’s assume there were 30 shares available in the market.
As only a partial portion of your order quantity is available, only that portion “30 shares” will be executed and the remaining unmatched portion of 70 shares will be canceled.
Type of IOC Orders
You can combine the IOC Order with Limit and Market Orders:
- When you use Limit IOC Order, the order will be executed at a specific price of your choice.
- And when you use the Market IOC Order, the order will be executed at the current best available price in the market.
Other Retention Orders
Day Order: It is a type of order that will be active for a day until the specified price is reached or canceled by you.
GTC Order: It is a type of order that will stay active for a month until the specific price is reached or canceled by you.
Usually, brokerage firms in India allow the GTC Orders to be active for a month. If the order is not triggered, then it will be canceled automatically.
Difference between Day and IOC
If you place an order and it is not executed immediately:
In the case of Day Order, it will remain pending until the end of the day, whereas in the IOC Order, it is canceled immediately.
Difference between GTC and IOC
If you place an order and it is not executed immediately:
In the case of GTC Order, it will remain pending for a month whereas, in the IOC Order, it is canceled immediately.
When to place an IOC Order Type?
- Quick Buy and Sell: In Options Trading, the prices move quickly, and it is difficult to buy or sell options at the price you want. In such cases, you can place a Limit IOC Order to Buy or Sell Options immediately at the desired price & quantity.
- Large Quantities: Market IOC Order Type is used while buying shares in large quantities to avoid the order being placed at multiple prices.
- Multiple Stocks: As you have already learned, the Day Order will remain active until the market closes unless closed manually. So people who trade in multiple stocks use IOC order to avoid the risk of forgetting to cancel the order manually.
- Illiquid Stocks: In the Illiquid Stocks, there are very few to no buyers and sellers. In such cases, you can place an IOC Order to get the stocks at the current market price or automatically cancel if the order doesn’t match.
Top Brokers offering IOC Order in India
- Aliceblue
- Upstox
- Zerodha
- Sharekhan
- ICICI Securities
Quick Summary
- IOC Order means Immediate or Cancel Order. Your order will either be executed immediately or get canceled in milliseconds.
- In case of a partial match, a certain part of the order will be executed, and an unmatched portion will be canceled.
- There are two types of IOC Orders:
- IOC Limit Order to buy or sell at a particular price and
- IOC Market Order to buy or sell at the current market price.
- The difference between IOC, Day, and GTC Order is only the Validity of the order.
IOC Order is most suitable during High Volatility or Illiquidity. And also, when you are trading in Huge Quantities or Multiple Stocks.
