What is IOC in Share Market? Find Out Here

In the last few years, the number of Indian people opening their Demat account has been increasing tremendously especially after the global stock market crash because of Covid-19. Long-term or fundamental investors stopped their investment activities during the market crash, whereas day traders or technical traders continued to trade in the market. This is because day traders can earn good profits during a volatile market.

An active trader takes several trades in a day and it can be tedious to track all the trades at a given time in the market. To solve this, one can place IOC (Immediate or Cancel) orders in the share market. However, it is important to understand what is meant by IOC in share market and the meaning of IOC before placing a real order. In this article, we are going to learn about what is meant by IOC in share market, IOC full form in share market.

This article covers: 

• What is the meaning of IOC in share market?
• How to place IOC orders in the stock market?

Difference between IOC and day order in the stock market

• Features of IOC order

What is the meaning of IOC in share market?

An immediate or cancel order is a type of order placed with a broker in the stock market. This order instructs the broker to sell or buy stock immediately, without waiting for the normal market order process to take place. And if the order does not get executed, it will be canceled or removed from the system.

For example, you place an IOC order of 50 shares of a company ABC but the shares are not available at the moment. In this case, the order will automatically cancel because you have placed an IOC order. An IOC order will either execute the order or cancel it. The trader does not have to stick to their screen to cancel the order if they have placed an IOC order. Also it is called duration order, meaning the order is valid for a few seconds.

Key takeaways: 

• IOC full form in share market is immediate or cancel order. It is also known as zero duration order as they barely delay, once the order is placed. 
• An IOC meaning in stock market is often used when a trader wants to buy or sell shares without having to set a limit for their trade.
• An IOC order can be used to protect against adverse movements in the market as well as to lock in profits from a position that has already been established.
• The IOC order also provides flexibility and control over how and when you want your trade executed.

How to place IOC orders in the stock market?

1. The first thing you need to do is open a Demat account & trading account from a broker that suits you. A Demat account is necessary to trade online and allows you to store various financial securities in your Demat account. 
2. Obtain knowledge on the stock market, how the market works, things you need to consider before investing in any instruments, understand IOC in share market, and what share market IOC means. 
3. Once your Demat account is active, you are all set to place buy and sell orders. However, the orders will be executed only when the prices will be matched between the number of traders who are placing buy and sell orders in the stock market. For example, if you want to buy a share at a certain price but there is no seller who is willing to sell the share at your desired price, your buy order will not be executed or you may have to wait till the market ends. And this is when the role of the IOC comes. 
4. Placing an IOC order removes the burden of waiting till the end of the market hour.

Difference between IOC and day order in the stock market

• An immediate or cancel order is an order to buy or sell stock that is placed immediately without waiting for the other orders to be filled. This type of order is typically used when the trader has a strong belief in the direction of the stock and does not want to wait for other buyers and sellers to complete their transactions. A day order, on the other hand, is an order to buy or sell stock at a specific price but the order expires at the end of that particular day. This type of order allows the trader to wait for other orders to fill and then take action based on the available prices. 
• In an IOC in share market, if the order does not get executed, it gets canceled automatically. In a day order, if the order is not executed instantly, it stays active and cancels at the end of the trading day.

Feature of IOC order

• The trader has the option to place the IOC order as a limit or market order. The IOC order as a market order is a type of order that allows the trader to buy or sell shares at the current market price, as opposed to a limit or stop order. On the other hand, IOC as a limit order allows the trader to buy or sell the security when the price of the security will reach the specified price. 
• This kind of order is mainly used by traders who want to buy or sell shares in a hurry and don't want to wait for their trade to be completed.
• This type of order can help investors avoid the problem of “limit price” orders, in which they specify the maximum price they are willing to pay for a security. By using IOC orders, investors can avoid paying more than they intended when prices rise during the time it takes for their order to be executed.
• The IOC order has many benefits for investors who want to trade in the share market. They can execute their orders quickly and get rid of them if they are not satisfied with the market conditions.
• Share market IOC meaning also allows the trader to get the benefits of partial fulfillment of orders. Let's understand with an example if you place an IOC order to buy 50 shares of an ABC company. However, only 20 shares are available to be sold at the moment, which means there are not enough shares available to be sold at the moment. In this case, you will be allotted only 20 shares and the order for the remaining 30 shares will be canceled right away. 
• An IOC order is effective when the trader wants to place a large order, especially in low-volume stocks. 
• You can also use algorithmic trading while placing IOC orders.
  
  To conclude, IOC in share market is immensely effective for active traders who are trading in various securities, quick buy and sell such as options trading, illiquid stocks, and in large volume. However, it should be used properly to make the best use of it and not manipulate the stock price. It saves a lot of time for active traders who don't have time to track their orders. To start IOC in share market, open a Demat & trading account.