How an immediate or cancel (IOC) order works on NSE

When you place an order with your broker, you choose its validity. One option is IOC, short for immediate or cancel. This page explains how an immediate or cancel order works, an example and when traders use it.

Quick answer

An immediate or cancel (IOC) order is an order that must be executed as soon as it reaches the exchange. Whatever quantity can be filled at once, at the stated price or better, is executed, and any unfilled quantity is cancelled immediately. It does not wait in the order book. IOC is one of the standard order validity options on NSE and BSE, along with Day validity.

Key takeaways

• An IOC order executes at once or is cancelled.
• Partial fills are allowed, and the rest is cancelled.
• It never waits in the order book.
• It is a standard validity option on NSE and BSE.
• It is often used by traders who want speed and control.

What is an immediate or cancel order?

Every order has a validity, which says how long it stays active. A Day order stays in the order book until it fills or the trading day ends. An IOC order has the shortest possible life. It gets one chance to match when it arrives, and then any remainder disappears.

IOC can be used with a limit price or as a market order. With a limit price, only the quantity available at that price or better is executed.

A simple example

You place an IOC buy order for 1,000 shares at Rs 250. At that moment, 600 shares are available at Rs 250 or lower. Your order buys those 600 shares, and the remaining 400 are cancelled right away. You do not have an open order left in the book.

If no shares were available at Rs 250 or lower, the whole order would be cancelled with nothing bought.

Why do traders use IOC orders?

IOC gives control. A trader can set the worst price they will accept and avoid leaving an order in the book that might fill later, after the market has moved. This is useful in fast-moving markets and for short-term trading strategies.

Algorithmic traders often use IOC orders, because they want to take available liquidity at once without showing a resting order to the market. It also avoids the risk of forgetting an open order.

What are the limits?

In thinly traded shares or options, an IOC order may get little or no fill. If you need the full quantity, you may have to place the order again, possibly at a worse price.

For long-term investors who are not in a hurry, a regular Day limit order is usually simpler, since it can wait for the price to come to it.

How IOC compares with fill or kill

A fill or kill order also must act at once, but it needs the full quantity or nothing. IOC is more flexible because it accepts a partial fill. On Indian exchanges, IOC is the standard choice for immediate execution of regular orders.

Frequently Asked Questions