Immediate-or-cancel (IOC) orders are an important tool for investors and traders who want to move quickly in volatile markets. With an IOC order, you can attempt to execute immediately, and then cancel any unfilled portion of the order. IOC orders can only partially fill; for example, if you place an order for 200 shares, you may only receive a partial fill of 100 shares but the unfilled portion of the order is automatically cancelled. An IOC order can be designated as a limit order or a market order.

A limit order specifies the maximum price you are willing to pay per share and allows you to fill at specified price or better. A market order will fill at the best available price. IOC orders are typically used in situations when there is significant volatility in the market, such as after a major piece of news is released or when a company releases its earnings results. By using an IOC order, an investor or trader hope to fill as much as possible of the order at current market prices before prices move.

IOC orders come with a few risks, however. Since IOC orders are immediately executed, there may be a risk that the order will not fill at prices that are advantageous to the investor or trader. Additionally, since IOC orders are immediately executed and partially filled, there may be a risk that the other remaining portion of the order may be cancelled at a worse price than the filled portion.

For this reason, investors and traders should be cautious when using IOC orders. They should make sure they understand how the orders work and should be comfortable with the risks they are taking. Investors and traders should also evaluate their strategies to ensure they are making the best order type selections for their specific trading needs.

In conclusion, IOC orders are an important tool in volatile markets, allowing investors and traders to attempt to match their orders to the current market prices. IOC orders have both potential upsides and downsides, as they may not always be filled at advantageous prices and the unfilled portion may be cancelled at a worse price. This risk should be taken into consideration when selecting an order type. By understanding the potential risks and rewards of IOC orders, investors and traders can better decide whether IOC orders are the right fit for their portfolios.