Immediate or Cancel Order (IOC): Meaning, Need and Benefits

 

Immediate or Cancel Order (IOC): Meaning, Need and Benefits

The stock market is a fast-paced environment, where thousands of traders constantly trading during market hours. In share market, it can be difficult for an investor to keep track of share prices and buy or sell several securities during the day.

Meaning of Immediate or Cancel Order (IOC)

An Immediate-Or-Cancel (IOC) is an order type used by investors to buy or sell a stock that must be executed immediately as soon as it is published into the market. This order type ensures that you must purchase or sell a security almost immediately, or the order will be cancelled immediately, and no longer remain as pending order.
IOC orders differ from other market orders, that they only require partial execution. GTC orders remain active until they are executed or cancelled by the client but most of the brokers cancel between 30 and 90 days. IOC order type helps investors to achieve price improvements by limiting risk, increase flexibility.

Benefits and need of Immediate or Cancel Order

To better understand the IOC order, a basic understanding of the market is needed. Learn basis of stock market and then opening free demat account is a good way to start in industry.

First of all, you need to open your demat account in one of the Broker.

1. Alice Blue-


2. Angel Broking

With the introduction of online trading accounts, it became easy and convenient to take entry in share market. If you have opened an online trading account and placed an order to buy or sell, there is no such guarantee that the order will be fulfilled or not.

An IOC should be used only in the below conditions
• Investors place several trades but unable to monitor each trade individually at same time.
• Minimize the risk of forgetting to cancel an order at the end of trading hours.
• When investors want to place an order but without controlling the prices.

What Distinguishes an IOC from a Day Trader?

The distinction between an IOC order and a day order is very simple and straight ward. If unfulfilled, a day order cancels at the end of the trading hours, while an IOC order is ended when the security’s unavailability is discovered.

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