What Is Fill or Kill (FOK)?
Let me explain what a Fill or Kill (FOK) order is—it's a conditional time-in-force order in securities trading that tells your brokerage to execute the transaction right away and in full, or cancel it completely if that can't happen.
If you're an active trader dealing with large quantities of stock, this is the type of order you'll use. It has to be filled entirely, or it's killed—no partial fills allowed.
Essentially, a FOK is a combination of an all-or-none (AON) order and an immediate-or-cancel (IOC) order.
Key Takeaways
- A Fill or Kill (FOK) order directs execution immediately at the market or a specified price, or cancellation if not filled.
- It combines an all-or-none (AON) requirement for full filling with an immediate-or-cancel (IOC) timeframe.
- Typical FOK orders last just a few seconds to avoid disrupting the stock's price, and partial fills are not permitted.
Understanding Fill or Kill
The main purpose of a Fill or Kill (FOK) order is to make sure your entire position gets executed at current prices without delay. If you don't specify FOK, completing a large order could take a long time, and that might cause big swings in the stock's price or even disrupt the market.
On some exchanges, you need to execute an FOK within seconds of it appearing to the trading community. Here, it's like an all-or-none order but with immediate cancellation if it's not fully filled. On other exchanges, it fills whatever shares are available from the first bid or offer, then cancels the rest—so you're getting what you can right away and dropping the remainder.
In practice, though, FOK trades don't happen that often. You might use other instructions instead, like immediate or cancel (IOC), which fills what it can right away and cancels the unfilled part, or good 'til canceled (GTC), which keeps the order open until it hits your specified price.
Fill or Kill Example
Suppose you're an investor looking to buy 1 million shares of Stock XYZ at $15 per share. If you want all 1 million shares right now, and no less, at $15 or better, place a FOK order.
If the broker has over a million shares but only wants to sell 700,000 at $15, the order gets killed. If they're willing to sell all 1 million but at $15.01, it also gets killed.
But if the broker agrees to sell the full 1 million at $15, it fills instantly. And if they offer it at a better price like $14.99, the order fills too.
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