IOC simply stand for Immediate Or Cancel (IOC) orders. As you get more and more familiar with trading terms and slang, you might realize that each term is supposed to be linked with others, which form this sort of conjoined strategies. These strategies are usually what result in successful trading, rather than speculation.
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.
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.
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.
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!
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.
These are the type of orders which are bought as soon as it is available in the market for trade. It expands to immediate and cancel orders and bought at a single value. IOC applications will partially fit, with any conflicting partial orders being automatically cancelled, and if no similar order is found, the request is automatically withdrawn.
IOC or Immediate or cancelled orders are useful when placing very large orders at one single price. Placing an IOC helps to reduce slippage costs that can eat into your trading and investment profits. In this way, one can stay assured that either their desired orders are fulfilled or will be cancelled right away.
IOC is an either-or situation type of order in Zerodha. its where you can either get your order immediately executed based on the initial input or get it canceled then and there if the execution part doesnt work out.
IOC is a very simple trading term that stands for Immediate or Cancelled Orders, it means you want to execute an order immediately at your mentioned (desired) price or cancel it. It is only used when traders are placing orders in very large quantities. In case IOC orders do not get matched then order are automatically canceled by the system.
Just an another order type where it is executed as soon as it is released or immediately canceled if it fails to execute. It is generally preferred when you buy very large quantity, otherwise small retailers prefer Day validity when they put limit orders.