immediate-or-cancel_ioc [CapiPedia]

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======Immediate-or-Cancel (IOC)======
An Immediate-or-Cancel (IOC) order is a type of [[order duration]] that instructs a [[brokerage]] to execute all or part of a trade //immediately// and then cancel any unfilled portion of that order. Think of it as a "now or never, but I'll take what I can get" command. Unlike a standard [[day order]], which remains active until the market closes, an IOC order has a lifespan of mere seconds. Its purpose is to capture available shares or contracts at a specific price point right now, without leaving a lingering order on the [[order book]]. If the market can only partially fill your request at your desired price, the IOC order will take that partial fill, and the remainder of the order simply vanishes. This gives the investor speed and flexibility, allowing them to test the market's [[liquidity]] without committing to a price that might soon become unfavorable.
===== How Does an IOC Order Work in Practice? =====
Imagine you're at a farmer's market, and you spot a vendor with your favorite apples priced at a fantastic $1 per pound. You want to buy 10 pounds, but you're in a hurry. You tell the vendor, "I'll take up to 10 pounds at this price, but only what you can give me right now." The vendor checks and finds they only have 7 pounds left. They sell you the 7 pounds, and you're on your way. You don't wait for them to find more, and you don't come back later. That's an IOC order in a nutshell.
Let's apply this to the stock market:
  * You want to buy 500 shares of a company, "Innovate Corp," and you're only willing to pay up to $100 per share. You place an IOC [[limit order]] for 500 shares at $100.
  * Your broker's system instantly scans the market. It finds that there are only 300 shares available for sale at or below your $100 price limit.
  * The system immediately buys those 300 shares for you.
  * The rest of your order—the part for the remaining 200 shares—is instantly and automatically cancelled.
The outcome? You now own 300 shares of Innovate Corp, and you have no pending order for the other 200. You got what was available at your price, and the transaction is complete.
===== Why Would a Value Investor Use an IOC Order? =====
While it might sound like a tool for fast-paced traders, the IOC order holds strategic value for the patient value investor. It’s all about control and precision.
==== Seizing Fleeting Opportunities ====
Value investors are hunters of bargains. Sometimes, a stock momentarily dips into your target buy zone—your desired [[margin of safety]]—due to a large institutional sale or a flicker of market panic. These windows of opportunity can be incredibly brief. An IOC order allows you to attempt to capture that low price instantly. If you get the shares, fantastic. If not, the order disappears, preventing you from accidentally buying later if the price rebounds out of your value range.
==== Avoiding Market Impact ====
Leaving a large, visible order on the books can be like showing your cards in a poker game. It signals your intention to the market. Other participants might see your large buy order and raise their asking prices, a phenomenon known as [[market impact]]. An IOC order is a stealth maneuver. It tests the waters for available shares without lingering, minimizing the risk that your own order will move the price against you.
==== Managing Risk in Volatile Markets ====
When [[volatility]] is high, prices can swing wildly in minutes. Placing a standard order leaves you exposed to these swings. An IOC order eliminates that uncertainty. You either get filled at your price, right now, or you don't. This control is invaluable when market conditions are choppy, ensuring you don't end up paying more than you intended.
===== IOC vs. Other Order Types =====
To truly understand IOC, it helps to compare it to its close cousins.
==== IOC vs. Fill-or-Kill (FOK) ====
A [[Fill-or-Kill (FOK)]] order is the stricter sibling of IOC. It also demands immediate execution, but with one key difference: the //entire// order must be filled. No partial fills are allowed.
  * **IOC**: "Fill what you can immediately, cancel the rest."
  * **FOK**: "Fill the whole order immediately, or cancel the whole thing."
==== IOC vs. All-or-None (AON) ====
An [[All-or-None (AON)]] order also requires the entire order to be filled, but it gives up the "immediate" requirement. An AON order can remain active (typically for the day) until a seller appears who can fulfill the entire quantity in one go.
  * **IOC**: Immediate, partial fill is okay.
  * **AON**: Not immediate, partial fill is //not// okay.
==== IOC vs. Good-'Til-Canceled (GTC) ====
A [[Good-'Til-Canceled (GTC)]] order is the polar opposite of IOC in terms of time. It remains active on the market for days, weeks, or even months, until it is either fully executed or manually cancelled by the investor. It's designed for patience, not speed.
===== The Bottom Line for the Investor =====
The Immediate-or-Cancel order is a tactical tool for precision. It's for the investor who values **certainty of price** and **speed of execution** over the guarantee of a full order. For a value investor, it’s an excellent way to act on short-lived price drops, control your entry point, and avoid telegraphing your moves to the broader market. Most modern [[brokerage platform]]s offer IOC as a standard option, making it a powerful and accessible feature for anyone looking to invest with greater control and strategic finesse.