Immediate-Or-Cancel (IOC) Orders, in the context of crypto trading, denote a specific order instruction requiring that any executable portion of the order be filled instantly upon submission, with the remaining, unfilled portion automatically rescinded. This order type prioritizes rapid execution and precise liquidity interaction.
Mechanism
When an IOC order is placed on a crypto exchange or an RFQ platform, the system attempts to match it against available liquidity at the specified price or better. If the entire quantity cannot be matched immediately, the executed portion settles, and the balance is canceled without being added to the order book. This minimizes exposure to adverse price movements and prevents lingering partial orders.
Methodology
The strategic application of IOC orders is critical for smart trading algorithms and institutional participants seeking to manage execution risk and capital efficiency across fragmented crypto markets. It enables rapid entry and exit from positions, particularly in volatile conditions or during institutional options trading, by ensuring that only immediately available liquidity is captured, thereby reducing slippage and controlling execution costs.
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