Trading 101 — Order Types: Immediate or Cancel (IOC)

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Trading Interface of a Financial Terminal

Immediate or Cancel order (IOC) is an order type similar to Fill or Kill (FOK) except that it accepts a partial order execution. The remaining part of the order (the part that is not executed instantly) is then cancelled. Fill and Kill (FAK) is another name given to IOC orders.

Pros: Large volume orders fulfillment (Institutions and Funds). Avoids driving price further than closest price in the order book (versus FOK). Can trigger hidden opposite orders.

Cons: Difficulty to control buy/sell price efficiently (or buy at limit). Large orders can fully execute all orders at the opposite side of the order book (liquidity syphoning).

Immediate or Cancel can be used in combination with limit and stop orders (Then triggers only when a threshold is met and has to execute instantly. The unfilled part, if any, is then cancelled.

IOC pays taker fees.

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