What it means
When you place an order to buy or sell a security, the exchange tries to match it with orders on the other side. A normal order can be filled slowly in several pieces as sellers or buyers appear.
A fill or kill order does not allow that, because the whole quantity must be matched at the limit price or better straight away. If the market cannot supply the entire amount at once, the order is cancelled in full.
The trader receives no shares, and nothing is left waiting in the order book. This is why the name includes the word "kill", which in trading language means cancel.
Traders use FOK orders when a partial fill would leave them with the wrong position, such as an unbalanced hedge or a portfolio that no longer matches its benchmark. A fund manager building a hedge, for example, might need to buy exactly 5,000 shares to balance a position.
If only 3,000 were bought, the hedge would be incomplete and the manager would still face the remaining risk. FOK is related to, but different from, immediate or cancel (IOC).
An IOC order fills as much as it can immediately and cancels the rest, which allows partial fills. FOK is stricter and requires the whole order to be filled.
The main drawback is that FOK orders can fail often, especially in thinly traded markets or for large sizes. A failed order can leave a trader exposed, and they may have to decide whether to try again at a worse price or in smaller parts.
Order handling rules vary between exchanges and brokers, so check that the venue supports this order type.
In practice
Real-world examples.
Example
A portfolio manager needs to buy exactly 10,000 shares to complete a hedge. She submits an FOK order so that the position is either complete or not started.
Example
A trader at a brokerage wants to sell a large block of a thinly traded stock at a set price. He uses FOK so that the order does not leak into the market in small pieces, which could signal his intentions to other traders and push the price down before the sale is complete.
Example
A retail investor trying out an online platform places an FOK order to buy 200 shares at a limit price. The order is cancelled immediately because only 150 shares were on offer at that price, and he learns that he must choose between a smaller order and a higher limit.
Formula
Calculation
Maximum cost of a buy FOK order = Quantity x Limit price
Suppose a trader submits an FOK order to buy 5,000 shares with a limit price of $20.00, so the most the order can cost is 5,000 x 20.00 = $100,000. If only 3,000 shares are available at $20.00 or below, the order is cancelled and no shares are bought. If 5,000 or more shares are available at $20.00 or below, the order fills in full, and the trader pays at most $100,000.Case study
Seen in the real world.
Meridian Asset Partners is an illustrative, fictional fund that needed to buy 20,000 shares of a mid-sized company to match the weights in a client's portfolio. The trader worried that a partial fill would leave the account out of line with its benchmark.
She submitted an FOK order at a limit price that she judged fair. The first attempt was cancelled because only 14,000 shares were available at that price, and the second attempt, placed an hour later, was filled in full.
The illustrative lesson is that FOK gives certainty about size at the cost of certainty of execution. The trader accepted that she might need to try more than once to keep the portfolio matched to its benchmark, and she logged each attempt so the compliance team could see why the orders had been cancelled.
Watch out
Common mistakes.
- Assuming a cancelled FOK order means something went wrong, when cancellation is the designed result if the full size is not available.
- Confusing FOK with immediate or cancel, which allows partial fills.
- Using FOK for very large orders in thinly traded stocks, where it is likely to fail repeatedly and waste time during fast-moving markets.
Questions
People also ask.
What does fill or kill mean?
It means the order must be executed in full straight away or cancelled completely.
Is an FOK order the same as a market order?
No, a market order fills at the best available price and may fill in parts, while an FOK order has a price limit and must fill entirely.
Can an FOK order sit in the order book?
No, it is either filled or cancelled at once and never rests in the book, so other traders cannot see it waiting.
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