An immediate-or-cancel (IOC) order is an order to buy or sell that must be executed as soon as it reaches the market, in whole or in part, with any unfilled quantity cancelled instead of being left in the order book. It is a time-in-force instruction, usually attached to a limit order. A buy IOC for 10,000 shares at 25.00, arriving when only 6,000 are offered at or below that price, buys the 6,000 and cancels the remaining 4,000.
The partial fill is what separates it from a fill-or-kill order, which is cancelled entirely unless the full quantity can be traded at once. A day order, by contrast, rests in the book until the session ends. Algorithms and smart order routers use IOCs to take the liquidity that is available on a venue without leaving a visible resting order that reveals their interest, and then send the unfilled balance elsewhere.