How do we define IOC in the Share market?
The Equity market or Share market has been inviting a multitude of individuals towards the trading profession. Many of the investors are the long-term players who tend to enjoy the assured benefits from the market. However, some risk-takers like to do the trading and earn their living, making these the only source of their income. The trades are taking place daily, and one can trade multiple shares from different companies simultaneously. It will lead to difficulties in managing all shares or stocks at one time. Thus, the IOC (Immediate or Cancel) order comes into the picture.
Define IOC order in the Share Market
IOC meaning in sharemarket refers to a time-based order that would get canceled if not executed immediately. To clarify, your order, if not sold due to the unavailability of the shares, will cancel out immediately without your intervention. This automatic process is the time-based orders that need to be executed within seconds or gets revoked.
Why do we need IOC in trading?
As explained above about the nature of IOC being a duration order which gets cancelled automatically. It becomes significant for many traders due to the tediousness of tracking so many stocks and active positions. Suppose you placed an order for purchasing 100 shares, but these are not available in the market. It is common in the share market because the number of buyers & sellers or the shares they selling & purchasing might not always match. It would create active positions, which might increase with time and are difficult to track. However, having IOC in trading helps a lot in this regard. The placed order will not create any active position, and it will get canceled if there is an unavailability of the stocks.
When will IOC order in trading be highly effective?
The IOC orders come to the rescue when you are the trader with a large number of stocks to handle and track. A large order, if left open for a long time will influence the price of the shares. Thus, your order at the time of a specific set price of the stock will either get executed or cancelled, eliminating any waiting or active positions.
You can make good use of this Immediate or Cancel (IOC) type of order in the Share Market. Take the wise decision for which stocks you want to buy with an IOC order, as it would eliminate the worries of tracking that order. It helps you trade swiftly without any seeming complications.