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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Trading Mechanism

In the F&O segment of Indian exchanges, which of the following is the correct description of the order type 'Immediate or Cancel' (IOC)?

An Immediate or Cancel order is matched immediately as far as possible, either fully or partly, and any portion that cannot be executed straight away is cancelled. It does not rest in the order book, which distinguishes it from day orders and stop-loss orders.

  1. AThe order stays in the book until the end of the trading day
  2. BThe order is executed immediately in full or in part as available, and the unmatched portion is cancelledCorrect
  3. CThe order is executed only if the entire quantity can be matched immediately, otherwise it is cancelled in full
  4. DThe order becomes active only when the market reaches a specified trigger price

Explanation

An IOC order is sent to the market for immediate matching; whatever quantity cannot be matched at once is cancelled. The option requiring the whole quantity is a fill-or-kill style condition, which is not IOC. A day order stays until end of day, and a trigger-price order is a stop-loss order.

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