What is Fill Or Kill Order (FOK)?

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Several trading platforms and exchanges provide a unique order type known as the “Fill or Kill Order” (FOK). This term encapsulates the concept that an order must be instantly and fully executed, or it will not be executed at all. The FOK order shares a kinship with the “All or Nothing” (AON) order type, which mandates an order to be entirely fulfilled or not executed. However, the distinction lies in the temporal dimension, as AON orders lack the immediate time-focused aspect seen in FOK orders.

Fill or Kill orders find utility when a trader is averse to partial asset delivery. For instance, when there’s a requirement to satisfy orders across distinct and disconnected markets or exchanges within a specific timeframe. In such scenarios, a FOK order allows the trader to initiate multiple orders and wait for one to be fully executed, avoiding the risk of receiving partial fills. Once a single order is entirely filled, the trader retains the capacity to cancel any remaining unexecuted orders.

The FOK order type thus caters to situations where precise execution is paramount, sparing traders from the prospect of partial fulfillment which might not align with their strategy or operational needs. This strategic tool is particularly beneficial in fast-paced trading environments where timing and completeness of execution play pivotal roles in achieving desired outcomes.

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