Meaning
Immediate-Or-Cancel (IOC) is an order type that requests immediate execution for as much of the order as possible. Any portion that cannot be filled right away is canceled.
How it works
When submitted to the matching engine, the order is matched against available liquidity at the current price or better. If a fill occurs, the corresponding quantity is executed; the remainder is canceled automatically and does not sit on the book.
Use in practice
IOC orders are used in fast-moving markets where speed is important or where a trader wants to avoid leaving an unfilled quantity exposed to market risk. They differ from market orders, which seek to fill as much as possible but do not automatically cancel any leftover quantity, and from Fill-or-Kill (FOK) orders, which require the entire size to be filled immediately or canceled entirely. IOC sits between these two extremes, offering partial fills if available immediately but not preserving unfilled shares.
Practical notes
IOC orders can interact with price improvement and queue priority. If multiple IOC orders at the same price arrive, the execution depends on available liquidity and the matching engine's rules. Because any remainder is canceled, IOC orders do not leave residual orders resting in the order book.
Regulatory and risk considerations
For retail traders, IOC orders can reduce exposure to adverse price moves but may result in partial fills.
An IOC order for 500 shares is submitted; 350 shares are filled at the current price, and the remaining 150 are canceled.
Market order · Limit order · Fill-or-Kill (FOK) order · All-or-None (AON) order · Partial fill · Iceberg order