什么是 IOC 订单？

What is an IOC order?

An immediate or cancel order (IOC) is an order to buy or sell a security that is immediately executed in whole or in part and then cancels any outstanding portion. An IOC order is one of several "duration" or expiration orders that investors can use to specify how long an order will remain active in the market and under what conditions it can be canceled.

Other commonly used duration order types include fill-or-cancel (FOK), all-or-none (AON), and good-to-cancel (GTC). Most online trading platforms allow IOC orders to be placed manually or programmed into automated trading strategies.

Key Points

• Immediate execution or cancellation (IOC) orders attempt to execute immediately and cancel any unfilled portion.
• IOC orders only need to be partially filled and can be designated as limit orders or market orders.
• IOC is a duration order type, other types include fill or cancel (FOK), all or nothing (AON) and good to cancel (GTC).

How IOC works

Investors can submit "limit" or "market" immediate execution or cancellation orders (IOCs) based on their specific execution needs. An IOC limit order is entered at a specific price, while an IOC market order does not come with a price and trades on the best offer for buys and the best bid for sells.

IOC orders differ from other duration orders in that they only need to be partially filled, whereas FOK and AON orders must be fully filled or canceled. GTC orders remain active until executed in the market or canceled by the client, although most brokers cancel them between 30 and 90 days.

When to use IOC orders

Investors often use IOC orders when submitting large orders to avoid being filled at different prices. IOC orders automatically cancel any portion that is not filled immediately. Suppose a trader places an IOC order to purchase 5,000 shares of International Business Machines Corporation (IBM). Any portion of the 5,000 shares not purchased immediately will be automatically cancelled. Those who trade multiple stocks in a day may use IOC orders to reduce the risk of forgetting to cancel the order at the close.

Tip: IOC orders help investors limit risk, speed up execution, and improve prices by providing greater flexibility.

Example

Let's say an investor places an IOC market order to buy 1,000 shares of Apple Inc. (AAPL). The order book showed bids for 2,000 shares at $170.95 and offers for 500 shares at$171.00. The order immediately fills 500 shares at the bid price ($171) and cancels the remaining 500 shares.

Let’s also assume that another investor places an IOC limit order to buy 1,000 shares of Apple stock for $169 when the market is open, and the stock is selling for$170. As the S&P 500 declined slightly in the afternoon, one seller offered 700 shares of AAPL at $169. However, since the order failed to fill earlier in the day, the IOC order was immediately canceled.

Benefits of using IOC

IOC limit orders can prevent bad trades in rapidly volatile or illiquid markets. IOC market orders, on the other hand, ensure full or partial fills in stocks with strong demand.

How does IOC affect market or limit orders?

A market order is an order to buy or sell a stock at the best available price and will be executed immediately. A limit order is an order to buy or sell a stock at a specific price or better. Market and limit orders may contain time limits and other trading instructions, such as IOCs. [1]

What does expiry date mean to market traders?

Traders use expiration instructions when placing orders to indicate how long the order will remain active before it is executed or expires.

Conclusion

An immediate or cancel order (IOC) is an order to buy or sell a security that is immediately executed in whole or in part and then cancels any unfilled portion, combined with an expiry date order. IOC limit orders protect investors in fast-moving markets, while IOC market orders secure full or partial fills in strong markets with high demand.

References

[1] U.S. Securities and Exchange Commission. "Understanding Order Types."

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