Kill

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Fill-or-Kill (FOK) Order

Definition

A fill-or-kill (FOK) order is a time‑in‑force instruction in securities trading that requires an order to be executed immediately and in its entirety or else be canceled. It ensures a trader either gets the full quantity requested at the specified terms right away or none of it.

Key features

  • Requires full execution immediately; otherwise the order is canceled.
  • Combines the all‑or‑none (AON) requirement with the immediacy of immediate‑or‑cancel (IOC).
  • Commonly used for large orders where partial fills or delays could move the market.
  • Not frequently used in retail trading; more common among institutional or active traders.

How it works

  1. The trader submits an FOK order (market or limit).
  2. The exchange or broker attempts to fill the entire order immediately at the specified price (or better if it’s a limit).
  3. If the full quantity is available and executable instantly, the order is filled.
  4. If the full quantity cannot be filled immediately at the specified terms, the order is canceled (killed).

Note: Execution rules vary by venue. Some exchanges require execution within seconds of being displayed; others may match what the first bid or offer can supply and cancel the remainder. Always check your broker/exchange specifications.

Practical example

An investor places an FOK limit order to buy 1,000,000 shares of XYZ at $15.00:
* If a seller is willing to sell all 1,000,000 shares at $15.00 (or a better price), the order is filled immediately.
* If only 700,000 shares are available at $15.00, the order is canceled (killed).
* If the full quantity is available only at $15.01, the order is canceled because it exceeds the limit price.

When to use and limitations

  • Use FOK when you need certainty that a large position is filled immediately and completely to avoid market impact or partial execution risk.
  • Limitations:
  • Low likelihood of execution for large orders in thinly traded securities.
  • May frequently result in canceled orders if liquidity is fragmented.
  • Alternative instructions (IOC, AON, GTC) may be more appropriate depending on whether partial fills or longer time horizons are acceptable.

Comparison with similar order types

  • Immediate‑or‑Cancel (IOC): Attempts immediate execution but allows partial fills; any unfilled portion is canceled.
  • All‑or‑None (AON): Requires full fill but can remain open (depending on time‑in‑force) until filled—does not require immediate execution.
  • Good‑Til‑Canceled (GTC): Keeps an order open until filled or canceled by the trader; not focused on immediate execution.

Bottom line

FOK orders provide a strict way to execute large trades instantly and in full, avoiding partial fills and reducing the risk of market disruption. Because they demand immediate complete liquidity at specified terms, they often go unfilled and are used selectively when immediacy and completeness are critical.