when to use an ioc order
investors typically use ioc orders when submitting a large order to avoid having it filled at varying prices an ioc order automatically cancels any part of the order that doesn t fill immediately assume 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 is automatically canceled those who trade several stocks throughout the day may use an ioc order to minimize the risk of forgetting to cancel an order at the close ioc orders help investors to limit risk speed execution and provide price improvement by providing greater flexibility examplesuppose an investor places an ioc market order to buy 1 000 shares of apple inc aapl the order book shows 2 000 shares bid at 170 95 and 500 shares offered at 171 00 the order would immediately fill 500 shares at the offer price 171 and cancel the unfilled portion of 500 shares let s assume another investor places an ioc limit order to buy 1 000 shares of apple at 169 around the market open when the stock is currently offered at 170 the s p 500 drops slightly in the afternoon and a seller offers 700 shares of aapl at 169 the ioc order however would not be filled because it was canceled immediately after not being filled earlier in the day 