Quick definition An order that executes immediately against available liquidity. Any unfilled quantity is cancelled instead of resting on the book. What it is An IOC order sweeps the opposite side of the book, taking whatever liquidity is available at the current market price. If the order is only partially filled, the remaining quantity is immediately cancelled. The order never rests on the book. Why it matters IOC orders are used when a trader wants to execute against available liquidity without leaving a resting order. A trader might use an IOC buy order to fill as much as possible at the current ask, then cancel any remainder. This prevents the order from resting and being filled later at a worse price. IOC versus Fill-or-Kill (FOK) A fill-or-kill (FOK) order cancels unless the entire order can be filled immediately. An IOC order accepts a partial fill. IOC is more likely to result in at least some execution, while FOK is an all or nothing proposition. Practical example A trader wants to buy 5,000 shares but will accept any fill. The trader submits an IOC buy order at the market. The best ask has 3,000 shares available. The order fills 3,000 shares at the ask price, and the remaining 2,000 shares are immediately cancelled instead of resting on the bid side of the book. Regulatory considerations IOC orders are supported on most US equity venues (NYSE, Nasdaq, Cboe) and most futures exchanges. Some international venues restrict their use. Always verify venue rules before submitting IOC orders in a new market. Execution behaviour An IOC order that receives no fill at all is simply cancelled, the same as a fill-or-kill order that cannot be fully filled. The distinction between IOC and FOK is whether a partial fill is acceptable. See also - Fill-or-kill (FOK) - Good-til-cancelled (GTC) - Day order - Limit order
