Immediate or cancel explained

An immediate or cancel (IOC) order, also known as an "accept order",[1] is a finance term used in investment banking or securities transactions that refers "an order to buy or sell a stock that must be executed immediately". In case the entire order is not available at that moment for purchase a partial fulfillment is possible, but any portion of an IOC order that cannot be filled immediately is cancelled, eliminating the need for manual cancellation.[2] [3] This "partial fulfillment" aspect is what differentiates IOC orders from all or none (AON) and fill or kill (FOK) orders, but the terms might be used interchangeably in some markets.[4] [5]

Benefits

It is considered a "clean, quick, and easy way to acquire securities or goods [that] can save time and money" and the "chances of receiving at least a portion of the order within the time frame required is very good".

IOC orders are generally employed when ordering "large quantities of stock".[6] The term is also used to describe an order for goods, especially when vendors are concerned that "not all items and quantities can be honored within the amount of time required by the customer". Placing an IOC order allows them to fill the order incrementally.

See also

Notes and References

  1. Web site: Tatum. Malcolm. What Does "Immediate or Cancel" Mean?. wiseGEEK. 22 March 2013.
  2. Web site: Immediate-Or-Cancel Order. U.S. Securities and Exchange Commission. 22 March 2013.
  3. Book: Khan, M. Y.. Financial Services. Tata McGraw-Hill Education. 2004. 978-0-07-058585-0. New Delhi, India. 15.19. en.
  4. Book: The Forbes / CFA Institute Investment Course: Timeless Principles for Building Wealth. Janjigian. Vahan. Horan. Stephen M.. Trzcinka. Charles. John Wiley & Sons. 2011. 978-0-470-94924-5. Hoboken, NJ. 66. en.
  5. Book: Harris, Larry. Trading and Exchanges: Market Microstructure for Practitioners. Oxford University Press. 2003. 978-0-19-514470-3. Financial Management Association Survey and Synthesis Series. Oxford and New York. 83. en.
  6. Web site: Extreme Orders for Everyday Investors. Scottrade Knowledge Center. 22 March 2013. May 2009.