How Can a Trader Use an “Immediate-or-Cancel” (IOC) Order to Limit Exposure during a Flash Crash?

An IOC order instructs the exchange to execute as much of the order as possible immediately, and then cancel any unexecuted portion. During a flash crash, this is a defensive tool.

If the price is moving rapidly, an IOC market order will only fill at the best available prices at that instant, and the remainder will be canceled, preventing the trader from being filled at the drastically worse prices that follow. It limits the total size of the trade exposed to extreme slippage.