Fill or Kill (FOK)

What Does FOK (Fill or Kill) Mean?

Fill or Kill (FOK) is a type of order used in trading that instructs brokers to execute a buy or sell order immediately and completely, or not at all. If the entire order cannot be filled right away, it gets canceled.

How It Works

• Immediate Execution Required: When you place a FOK order, you’re saying you want the entire order filled at the best available price right now. If only part of the order can be filled, the entire order is canceled.
• No Partial Fills: This ensures that you either get exactly what you want or nothing at all, which can be particularly useful in volatile markets where prices can change quickly.
• Used for Large Orders: FOK orders are often used by traders looking to execute large trades without being partially filled, which could expose them to market risk.

Example

Imagine you want to buy 1,000 shares of a stock at $10 each. You place a FOK order. If there are 1,000 shares available at that price, the order is executed. However, if only 800 shares can be filled, the entire order is canceled.

Key Takeaways

• FOK is an order type that requires immediate and complete execution of the order.
• It protects traders from partial fills, ensuring they either get their full order or none at all.
• FOK orders are beneficial in fast-moving markets where prices can change rapidly.

In short, Fill or Kill orders are a strict way to trade, ensuring that you either get exactly what you want right away or walk away empty-handed.