What is IOC in Share Market? { The Beginner’s Guide }:

Share market is the place which is too much crowded with all the shareholders and the interest that the entire participant shows by involving in the finance segment.

There are many terms that are used in the share market.

Let’s understand one of the terms from it.

So, this article is on “What is IOC in Share Market?”

In the share market, at a same time there are many shareholders that punch their trade during the specific trading hours.

For a traders, who are specifically doing a lot of trades during a day that can be either buying or selling the securities for them to keep the track record on the stock prices and to plan the trade is difficult.

For that purpose, there is a facility of placing an IOC Order that is Immediate or Cancel Order in the share market.

Let’s start first with the understanding of “What is IOC in Share Market?”

What is IOC in Share Market?

An IOC is one of the types of “order” that can be used by the investor or the trader to place their trade in the share market.

This type of order defines that as soon as the order is punched into the stock market, there is a need that it should be executed.

In a nutshell, this means that if the investor or the trader punches their trade there is a need that the action on the securities to be happens immediately, and if this action is not completed then the order is cancelled and there will be no pending trades or order.

This kind of orders are automatically gets cancelled and this required no interference from traders or investors side.

An IOC is just like a ‘duration’ order that means the trader will make the decision on how long will be the order sustain or remain active in the market.

When we talk about IOC then, it is just a ‘Zero Duration’ order where only a few seconds gap remains in between the punching of trades and its execution.

There is a facility by which you can set an IOC order as a limit or market order.

By this let me explain you the order meaning.

A limit order defines that the trader or investor would buy/sell the security when stock value comes at a particular price.

Whereas, a market order states that the trade will be executed at the current stock price.

Let say, for instance: You initiate with an IOC market order to buy 100 Shares of ABC Company.

Then the order is immediately liberated into the market.

Further, the order will be cancelled if it is not completed.

In case of partial fulfillment of only 10 shares being bought, the order for the remaining 90 shares will get cancelled.

So, this was all about the basic definition and understanding on IOC order in Stock market.

When an IOC order is most useful?

In the above section, we have just discussed about the meaning of IOC Order in the Share market.

With that, you get an understanding on when to use an IOC Order.

The best time to issue an IOC order would be when you want to punch a large order but you don’t want to influence the market participants by being ‘present’ in the market for long time.

The conditions for partial fulfillment states that an IOC is flexible and it will allow you to get the best you can from the market.

This facility of issuing an IOC order is available in any online trading platform.

You also get the facility from your trading platform to build an IOC order into your programs and from that you can trader effectively.

When the investors or traders have multiple securities while trading but due to lack of timing and effort to monitor there you can set an IOC order for that specific securities.

What is the difference between an IOC and a day order?

The only difference in an IOC order and a day order is very simple.

An IOC order means it is cancelled as soon as the unavailability of the financial security is found and whereas, a day order gets expires at the end of the same trading day if it is unfulfilled.

When an IOC Order is gets effective?

An IOC order is most effective when there is a large order to be placed and in this you also do not need to influence the markets.

When there is a large order especially when there is low volume stocks then there is a room for influencing the price if this is opened for longer time.

The IOC Order doesn’t remain active for a longer time period and there is a facility of partial fulfillment this make it as a flexible option.

An IOC order can be built in the online trading account.

This order option is a potent too for the algorithms or the programs user to trade through their free trading account.

This also helps in trading nimbly and it doesn’t require to monitor any large order whatever you punch online.

So, that’s was all about the IOC order and its basic importance.

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Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.