Key Takeaways
- Entire order executes immediately or cancels.
- No partial fills allowed under any condition.
- Used for urgent, large-volume trades.
- Depends on sufficient market liquidity.
What is Fill Or Kill (FOK)?
A Fill Or Kill (FOK) order is a type of trading instruction that requires the entire order to be executed immediately and in full at a specified price or better, or else the entire order is canceled. This ensures no partial fills, giving traders certainty in fast-moving markets.
FOK orders differ from other order types like immediate-or-cancel (IOC) orders, which allow partial executions before canceling the remainder.
Key Characteristics
FOK orders have distinct features designed for urgent, complete executions:
- Immediate execution: The order must be filled completely within seconds or it is canceled.
- No partial fills: Unlike IOC orders, FOK rejects any incomplete execution.
- Time-sensitive: Usually valid only during market hours and often used for large orders.
- Liquidity dependent: Success depends on sufficient volume at the limit price or better.
- Broker variations: Some platforms enforce strict full fills, while others may fill partial quantities before canceling.
How It Works
When you place an FOK order, you specify the quantity and price along with the fill-or-kill condition. The broker or exchange immediately checks available liquidity to see if the entire order can be filled at the desired price.
If the full quantity is available, the order executes instantly; if not, it is canceled entirely. This mechanism helps avoid lingering partial positions that can expose you to price risk, especially useful for day traders and institutional investors.
Examples and Use Cases
FOK orders are commonly used in scenarios requiring full and immediate execution, such as:
- Airlines: Delta and American Airlines may use FOK orders for large block trades to manage their stock positions efficiently.
- Crypto trading: Traders on platforms featured in best crypto trading platforms use FOK orders to enter or exit positions at precise price points without partial fills.
- High-volume stock trades: Large institutional investors rely on FOK to avoid partial execution risks during volatile sessions.
Important Considerations
FOK orders provide certainty but come with trade-offs. Since the entire order must be filled instantly, these orders are frequently canceled in illiquid or thin markets, requiring you to monitor market depth carefully.
Additionally, not all brokers support FOK for every asset or order type, so reviewing your broker's policies and considering alternatives like iceberg orders or trading in a dark pool may be necessary for large trades. You might also compare commission structures among best commission-free brokers to optimize execution costs.
Final Words
Fill or Kill orders ensure your trade is executed fully and immediately or not at all, minimizing partial fills and exposure to price fluctuations. Use FOK when you need quick, all-or-nothing trades and verify your broker’s execution policies before placing such orders.
Frequently Asked Questions
Fill Or Kill (FOK) is a type of trading order that requires the entire order to be executed immediately and completely at the specified price or better, or else the order is canceled entirely with no partial fills allowed.
Unlike IOC orders that allow partial fills before canceling the remaining shares, FOK orders demand full execution instantly or they get canceled completely without any partial fills.
FOK orders are ideal for active traders who need to execute large volume trades instantly and want to avoid partial fills that might expose them to price risks in fast or liquid markets.
Generally, FOK orders are not compatible with stop-loss, stop-limit, or short-sale orders on many broker platforms and are mainly used during market hours for straightforward buy or sell orders.
If the full quantity of an FOK order cannot be matched instantly at the specified price or better, the entire order is canceled immediately, preventing any partial executions.
FOK orders are typically valid only during market hours and usually for the current trading day; they generally cannot be placed for after-hours or extended trading sessions.
FOK orders are commonly used across liquid markets including stocks, futures, and cryptocurrency exchanges where instant full execution is critical.
Some brokers may fill what is immediately available and cancel the rest, while others strictly require the entire order to be filled or canceled, so it's important to understand your broker's specific FOK policies.
