Advanced Trading: Immediate or Cancel Order (IOC)
An Immediate or Cancel (IOC) order is a trade that executes immediately and cancels any unfilled portions of the order. Partial fills are possible as long as it is executed immediately.
IOC orders are different from Fill or Kill orders (FOK) because an IOC order can be partially filled, whereas a FOK order needs to be filled completely or else the order is canceled. An IOC order can help traders limit their risk, improve the speed of a trade’s execution and in some cases help a trader get a better price for a cryptocurrency by giving them enhanced flexibility.
Traders can strategically use IOC orders when they submit an order to buy a large amount of cryptocurrency in order to prevent an order being filled at multiple prices. An IOC order will automatically cancel any part of the trade that is not immediately filled after the trade order has been made.
For example, if a trader places an IOC order to buy 10 Bitcoin at $10,000, but the market’s lowest offer is 10,500 the IOC order will be open. Now throughout the day the lowest offer from another trader is to sell 2 Bitcoin at $10,000 then the IOC order will execute 2 Bitcoin at $10,000 and cancel the remaining 8 Bitcoin order. Submitting an IOC order can be useful to traders who buy or sell multiple cryptocurrencies on a given day by minimizing the risk of them forgetting to cancel the order manually.
IOC limit orders can be used strategically to help a trader prevent a bad fill in a fast-moving market or in markets with low levels of liquidity. Similarly, IOC limit orders can facilitate the complete or partial execution of a positively trending cryptocurrency that has strong market demand.
An IOC order is an example of a duration order. Duration orders allow traders to specify how long they want an order to remain active while also specifying the conditions when they want the order to be canceled. Other duration orders include fill or kill orders, good till canceled (GTC) orders and all or none (AON) orders.
Example of an IOC Order
• Imagine a trader places an IOC limit order to buy 10 Bitcoin at $9,900 and Bitcoin is trading at $10,000. Assume that by the afternoon the price of Bitcoin falls and a seller offers 7 Bitcoin at $9,900. The IOC limit order will automatically and immediately fill the 7 Bitcoin at the offer price ($9,900) and cancels the remaining 3 Bitcoin.
How to Place an Immediate or Cancel (IOC) order on NDAX
• Login to https://ndax.io/
• Once you log in you will be redirected to your dashboard
• Click TRADE on the left-hand side of the screen
• On the trade page, click BUY (Green button) or SELL (Red Button) on the right side of the screen
• Click the small GREY ARROW in the upper left corner of the screen to pick the CRYPTOCURRENCY/CAD pair.
• Click the small GREY ARROW on the pop-up to display the dropdown list of Advanced trade orders.
• Click on IOC
• ENTER ORDER SIZE
• ENTER LIMIT OFFSET
• Click PLACE BUY/SELL ORDER