Loading the player...

What is an 'Immediate Or Cancel Order - IOC'

An immediate or cancel order (IOC) is an order to buy or sell a security that must be executed immediately, and any portion of the order that cannot be immediately filled is cancelled. An IOC order is one of several "duration orders" that investors can use to specify how long the order remains active in the market and under what conditions the order is cancelled.

BREAKING DOWN 'Immediate Or Cancel Order - IOC'

Investors can place a variety of security trades that indicate a minimum price of a sell order or a maximum price before a sell order is filled. Orders can include other conditions, such as an instruction to fill the entire order or only a portion of the trade.

How Large Security Trades Are Filled

An IOC order requires all or part of the order to be executed immediately, and any unfilled parts of the order are cancelled. Partial fills are accepted with this type of order duration, unlike a fill-or-kill order, which must be filled immediately in its entirety or be cancelled. An IOC order may be used when a large order is submitted to the market. To avoid having a large order filled at a wide variety of prices, an IOC automatically cancels any part or the order that does not fill immediately. Assume, for example, that a client places an IOC order to purchase 500,000 shares of IBM common stock. Any portions of the 500,000 shares that are not purchased immediately are cancelled.

The Differences Between Market and Limit Orders

When a trader submits an order to buy or sell a security, he can use a market order or limit order, both of which control the price the trader receives. A market order instructs the trader to place the order as soon as possible and obtain the best available price (or prices). If the 500,000 IBM buy order is a market order, the trade fills for all shares at the best prices available. Since the order is large, the market order may fill at several different prices. A limit order, on the other hand, is filled at a specific price or better. For example, if the IBM buy trade is placed as a $50 limit order, the order does not fill until the stock trades at $50 or lower. By contrast, a $30 sell limit order does not fill until the stock trades at $30 or lower. Technical analysts often use limit orders.

RELATED TERMS
  1. Fill

    A fill is the action of completing or satisfying an order for ...
  2. Good This Month - GTM

    A limit order to buy or sell a security that remains in effect ...
  3. Cancel Former Order - CFO

    An order from an investor to a broker, to cancel a previously ...
  4. Canceled Order

    A canceled order is a previously submitted order to buy or sell ...
  5. Order

    An order is an investor's instructions to a broker or brokerage ...
  6. End of Day Order

    An end of day order is a buy or sell order requested by an investor ...
Related Articles
  1. Trading

    Understanding order execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  2. Trading

    Stop-loss or stop-limit order: Which order to use?

    While both can provide protection for traders, stop-loss orders guarantee execution, while stop-limit orders guarantee price.
  3. Investing

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
RELATED FAQS
  1. How can I use a buy limit order to buy a stock?

    Learn how a buy limit order is used by an investor who wants to buy a stock at a certain price, and understand how limit ... Read Answer >>
  2. How long does it take a broker to confirm a trade after it is placed?

    Learn about placing trades with a broker and the amount of time required to received confirmation of different types of orders. Read Answer >>
  3. Why do limit orders cost more than market orders?

    Learn the difference between a market order and a limit order, and why a trader placing a limit order pays higher fees than ... Read Answer >>
  4. Why can't I enter two sell orders on the same stock?

    The limitation on sell orders protects investors. Learn 3 reasons why you can't enter multiple sell orders and the downsides ... Read Answer >>
  5. When is a buy limit order executed?

    Understand how buy limit orders work, and factors such as the bid-ask spread and market volatility that traders must consider ... Read Answer >>
Hot Definitions
  1. Capital Asset Pricing Model - CAPM

    Capital Asset Pricing Model (CAPM) is a model that describes the relationship between risk and expected return and that is ...
  2. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  3. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  4. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  5. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  6. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
Trading Center