IOC Order Immediate or Cancel
An Immediate or Cancel (IOC) order is a type of market order that instructs the broker to execute the order immediately at the specified price or better. Any portion of the order that cannot be filled immediately is automatically cancelled, not queued.
What Is an IOC Order?
When you place an IOC order:
– If the full quantity is available at your price: the entire order executes immediately
– If only partial quantity is available: the available portion executes and the remaining quantity is cancelled
– If no quantity is available at your price: the entire order is cancelled
IOC orders are used when you want to transact at a specific price but do not want the order to sit in the order book and potentially execute at a later (unfavourable) time.
When Is an IOC Order Used?
– **Institutional trading**: large funds entering or exiting positions want immediate execution to minimise market impact
– **Highly volatile stocks**: prices can change quickly; waiting in the order book is undesirable
– **Algorithmic trading**: algo strategies use IOC to ensure no unexecuted orders linger
– **Futures and options**: for precise entry or exit at a specific strike without carry-forward risk
IOC vs Fill or Kill (FOK)
| Feature | IOC | FOK |
|———|—–|—–|
| Partial fill | Allowed | Not allowed |
| Full fill required | No | Yes |
| Unused quantity | Cancelled | Entire order cancelled if any part unfillable |
Practical Example
A trader wants to buy 5,000 shares of a stock at Rs 150 per share using an IOC order. The order book shows 3,500 shares available at Rs 150. The IOC order immediately buys 3,500 shares and the remaining 1,500 shares are automatically cancelled. No partial order sits in the order book waiting.
Key Takeaways
– IOC orders execute immediately at the specified price; unfilled portions are cancelled, not queued
– Allows partial execution, unlike FOK (Fill or Kill) which requires full execution or cancellation
– Used by institutional investors, algo traders, and in volatile markets for controlled execution
– Prevents orders from sitting in the book and executing at unexpected times
– Available on NSE and BSE for both equity and derivative segments
