What Is Fill or Kill (FOK)?
Fill or kill (FOK) is a conditional type of time-in-force order used in securities trading that instructs a brokerage to execute a transaction immediately and completely or not at all. This type of order is most oftenused by active traders and is usually for a large quantity of stock. The order must be filled in its entirety or else canceled (killed).
A FOK is essentially an all-or-none (AON) and immediate-or-cancel order (IOC) combined.
Key Takeaways
- A Fill or Kill (FOK) order is an order that is directed to be executed immediately at the market or a specified price or canceled if not filled.
- A FOK order combines an all-or-none (AON) specification indicating it must be filled entirely with an immediate-or-cancel (IOC) timeframe.
- Typical FOK orders last a couple of seconds to minimize disruption to the stock's price and partial fills are not allowed.
Understanding Fill or Kill
The purpose of a fill or kill (FOK) order is to ensure that an entire position is executed at prevailing prices in a timely manner. Without a fill or kill designation, it might take a prolonged period of time to complete a large order. Because such orders are typically placed for large quantities, prolonged execution of the order has the potential to cause significant changes to a stock's price and causing market disruption.
On some exchanges, an FOK should be executed within a few seconds of it being shown to the trading community. In this context, the market or limit order FOK is treated similarly to an "all or none" order with the exception that it is immediately canceled if not completely filled. On other exchanges, an FOK is executed by filling the order with the number of shares that the first bid or offer makes available. Then, any unfilled balance of shares would be canceled. In this context, the FOK is a way for a buyer or seller to fill what is possible, then cancel the rest.
In reality, however, the fill-or-kill type of trade does not occur very often. Other methods of instructing a brokerage on the time frame in which a trade is to be executed include immediate or cancel (IOC) which means to fill all or part of the order immediately, then cancel any part that cannot be filled, and good ‘til canceled (GTC), which keeps an order open until it is able to be filled at a specified price.
Fill or Kill Example
Assume an investor wants to purchase 1 million shares of Stock XYZ at $15 per share. If the investor wants to buy 1 million shares fairly immediately, and no fewer, at $15 (or better), an FOK order should be placed. Assume the order is placed. If a broker has more than a million shares in its inventory and would only like to sell 700,000 shares at the $15 price, the order would be killed. If the broker is willing to sell 1 million shares but only a price of $15.01, the order would be killed.
On the other hand, if the broker is willing to sell the full 1 million shares at $15, the order would be filled instantly. Also, if the broker is willing to sell the full 1 million shares at a better price, say $14.99, the order would also be filled.
FAQs
The FOK order works by either filling orders completely or cancelling them immediately if the full quantity cannot be filled at the specified price. Examples of FOK orders include stock trading, options, and futures. Advantages of FOK orders include reducing the risk of partial fills and minimizing market exposure.
What is an example of a fill and kill order? ›
Fill or Kill Example
Assume the order is placed. If a broker has more than a million shares in its inventory and would only like to sell 700,000 shares at the $15 price, the order would be killed. If the broker is willing to sell 1 million shares but only a price of $15.01, the order would be killed.
What is the fill or kill order process? ›
Overview. Fill-kill means that a vendor will "fill" a purchase order from available stock, and consider any remaining balance on the order "killed" or "dropped." The system lets you implement fill-kill processing for vendors with which you have fill-kill agreements.
What does an order designated fill or kill FOK mean that the order must be executed? ›
A Fill-Or-Kill order is an order to buy or sell a stock that must be executed immediately in its entirety; otherwise, the entire order will be cancelled (i.e., no partial execution of the order is allowed). Learn More.
What is the big difference between a fill or kill FOK order and an all or none aon order? ›
Execution Condition: A fill or kill order specifies that the entire order must be filled immediately or canceled if the entire order cannot be filled at once. An all or none order, on the other hand, specifies that the entire order must be filled at once or not at all, but does not require immediate execution.
What is a fill order? ›
It is the basic act of any market transaction – when an order has been completed, it is often referred to as 'filled' or as the order having been executed.
What does fak mean in trading? ›
Fill and Kill (FAK) Order - FAK orders are immediately executed against resting orders. Any quantity that remains unfilled is cancelled.
How long does a fill or kill order last? ›
A fill or kill (FOK) order is "an order to buy or sell a stock that must be executed immediately"—a few seconds, customarily—in its entirety; otherwise, the entire order is cancelled; no partial fulfillments are allowed.
What is kill and fill? ›
Kill And Fill refers to a data operation where all the existing data in a table is deleted (kill) and then replaced with new data (fill). Limit (discount rule) The maximum price allowed for a source or target to be part of a deal.
What is the difference between fill or kill and market order? ›
An FOK order must be filled at 100% within seconds or it's automatically canceled. Fill or kill orders are not the same as market orders or limit orders; market orders are filled instantly at the market rate and limit orders can be partially filled and take time to reach fulfillment.
abbreviation for fill or kill order: an instruction to a broker (= someone who buys and sells shares for other people) to buy or sell particular shares immediately. (Definition of FOK from the Cambridge Business English Dictionary © Cambridge University Press)
What is FOK slang for? ›
fok – Afrikaans for "f*ck", can be used in most ways it is used in English.
Is a fill or kill order must be immediately filled in one trade or canceled completely? ›
A Fill or Kill (FOK) order is an order to buy or sell a security that must be executed immediately in its entirety; otherwise, the entire order will be canceled. Partial execution of the order is not allowed.
How do you place a fill or kill order? ›
If the market is closed or live prices aren't displaying, select 'Place a fill or kill order'. Select to buy or sell, then enter the value/number of units. Enter the Price limit, which is the maximum price per share you want to pay or the minimum you want to receive and select 'Continue'.
Is fill or kill immediate? ›
Fill Or Kill (FOK) Order Explained
It is an instruction to buy or sell a stock at the best price. These orders are usually executed immediately. It is an instruction from an investor sent to a broker or brokerage firm.
Can fill or kill orders be partially filled? ›
1) On some exchanges, a market or limited price order that is to be executed in its entirety as soon as it is represented in the trading crowd, and, if not so executed, is to be treated as canceled. In this context, no partial fills are accepted, and the FOK order is treated as an IOC, AON order.
What is the difference between FOK and IOC? ›
An immediate-or-cancel order (IOC order) is one which has to be executed immediately and fully, or as fully as possible. Non-executed parts of an IOC order are deleted without entry in the order book. A fill-or-kill order (FOK order) is one which has to be executed and fully or not at all.
What is the difference between AON and IOC? ›
IOC orders differ from other duration orders in that they only require a partial fill, whereas both FOK and AON orders must be filled in their entirety or canceled. GTC orders remain active until executed in the market or canceled by the client, although most brokers cancel them between 30 and 90 days.
