Immediate or Cancel (IOC)

Immediate or Cancel (IOC) Definition

Immediate or Cancel, also known as IOC is a Time in Force that is used with Market Orders in cTrader. The instruction Immediate or Cancel with a Market Order means that the order should be filled immediately. Anything not filled should be cancelled, i.e. partially filled.

An example of IOC in action would be a large Market Order to BUY 10,000,000 EUR/USD, but there is only 3,000,000 EUR/USD available at that moment. Because of the IOC rule, 3,000,000 EUR/USD will be filled, the rest will be cancelled. This will be considered a partial fill. IOC is an important measure that protects traders when placing Market Orders. Especially orders of the size used in the previous example. If you remove all the liquidity from the order book, then you don’t know what the next prices will be when fresh quotes come in. The policy prevents the order from being filled at a wide variety of prices. This can lead to the final VWAP to be much worse than the desired market price at the time of placing the order. This will, therefore, put the entry price further away from profitability.

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