IOC is one such term, one such function, which does not have a behemoth scope, but the knowledge of which just might save and/or even make money.

What is IOC ?

Immediate Or Cancel (IOC) orders are a particular form of order that basically sends a command in your broker terminal, to either fulfill the order immediately or cancel it. To understand properly how it works, let us consider what happens during a normal order i.e. Day order.

When you place an order on your terminal, which is basically an assorted marketplace for buyers and sellers of shares, what the terminal does is match the demand with the supply. That is, basically the terminal connects the sellers with buyers. It does that by considering both price and quantity, with an emphasis on price first. (It is obviously a much more complex process)

But the interesting thing is, this meeting of buyers and sellers on basis of both quantity and price might not happen instantaneously. In fact, when you select the Day option, what is essentially implied is that during the particular trading day, that order has to be fulfilled. It is not a tightly time bound process, essentially pointing out to the fact that the prevailing market price might very well change or even have huge fluctuations between the time you place the order and the time that order is fulfilled.

Immediate or Cancelled Orders (IOC)

Here enters Immediate or Cancel orders. As the name implied, this basically signals your broker to either fulfill the order immediately, which means connecting with a buyer or seller instantaneously, or cancel the said order. Obviously, this is a time bound order, which might point to the only other variable in trading which is entirely time bound as well, price. The implication here is that either the order gets fulfilled at that particular price or it doesn't get fulfilled at all.

Another scenario of consideration here can be the quantity, or the volume of the trade. It may so happen, that while the price is similar to the IOC order, the quantity demanded by the buyer is or sold by the seller is not so. In this case, there can be multiple scenarios here, but the end result is that the amount of quantity possible with keeping IOC order price intact is considered, and for the rest of it, the order is deemed cancelled.

How to use IOC in Zerodha?

Using IOC in Zerodha, like most of the features of the terminal is really simple. You can easily place an IOC order in Zerodha by just following the below mentioned steps:

1.Go to Kite, Zerodha's web trading terminal.

2.Add the stock you want to buy or sell in your watch list (optional but useful).

3.Click on BUY or SELL.

4.Select the type of order, price and everything else as desired.

5.Scroll to the term 'Validity' in the same window, and select 'Immediate or Cancel'.

6.Place the order, it is that simple!

IOC in Zerodha

Trading can be tricky, and has a steep learning curve. But once you get past that, it might be one of the best professions on the planet. We try to explain useful product codes like IOC, CNC, MIS, etc. in a simple manner. For any queries, do discuss.