Clear DefinitionsFill or Kill (FOK) Order
2 min read
Pronunciation
[fil awr kil awr-der / ef-oh-key awr-der]
Analogy
Imagine ordering five specific, rare comic books from a dealer at a set price. A Fill or Kill order is like telling the dealer: 'I need all five comics right now at this price. If you don't have all five available immediately, cancel the entire deal. Don't just send me the three you have.'
Definition
A Fill or Kill (FOK) order is a type of time-in-force instruction used in trading that requires an order to be executed immediately in its entirety at the specified price or better. If the order cannot be filled completely and immediately, it is cancelled ("killed") without any partial execution.
Key Points Intro
FOK orders ensure that trades are executed completely at the desired moment, or not at all, avoiding partial fills.
Key Points
Immediate Execution Required: The order must be filled as soon as it becomes available in the market.
Complete Fill Necessary: The entire size of the order must be executed; partial fills are not allowed.
Automatic Cancellation if Unmet: If either condition (immediate and complete fill) cannot be met, the order is automatically cancelled.
Prevents Partial Execution Risk: Useful for traders who need to ensure their entire position is entered or exited at once.
Example
A trader wants to buy exactly 10 ETH at a limit price of $4000. They place a Fill or Kill (FOK) limit order. If the exchange can immediately match the entire 10 ETH order at $4000 or lower, the trade executes. If only 5 ETH is available at that price, or if there's any delay, the entire 10 ETH order is cancelled instantly.
Technical Deep Dive
FOK is a "time in force" condition applied to orders (like limit or market orders). The exchange's matching engine attempts to fill the FOK order immediately upon receipt against resting orders in the order book. If the full quantity cannot be matched at the specified price (or better for limit orders) without delay, the engine cancels the order entirely. This contrasts with Immediate Or Cancel (IOC) orders, which allow partial fills before cancelling the remainder, and Good 'Til Canceled (GTC) orders, which remain active until filled or cancelled.
Security Warning
Ensure you understand the implications of FOK orders. If the market is illiquid or moving quickly, FOK orders might be frequently cancelled, potentially causing missed trading opportunities. Use with caution, especially with large orders in thin markets.
Caveat
FOK orders are not supported by all exchanges or trading platforms. Their utility depends on the trader's strategy and market conditions. A rapidly moving market might make immediate full fills difficult.
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