DEFINITION of FOK
FOK fill or kill, the order is ” presents an order to buy or sell a stock that must be executed immediately”, in a few seconds, in its entirety. Otherwise, the entire order is canceled; no partial fulfillments are allowed.
WHAT IT IS IN ESSENCE
It is an “extreme orders”. Fill or kill (FOK) is a client’s instruction to his or her broker to either fill the entire order immediately or to cancel the order.
FOK orders are most commonly used when trader order is for a large quantity of stock. And is usually a market or limit order that requires immediate execution.
They are also used when several unlinked markets are available for the same asset. In this case, the trader will try to get the whole order filled in each market sequentially. Without having to manually cancel each order if it is unfilled.
Fill is the term used to refer to the satisfying of an order to trade a financial asset. It is the basic act of any market transaction.
When an order has been completed, it is often referred to as ‘filled’. Or as the order having been executed.
There is no guarantee that every trade will become filled. This type of order is most often used by active traders and is usually for a large quantity of stock.
The order must be filled in its entirety or canceled (killed).
HOW TO USE
A Fill or Kill (FOK) order is an order to buy or sell a security that must be executed immediately in its entirety. Otherwise, the entire order will be canceled. Partial execution of the order is not allowed.
When traders are aware of a big order, they will drive the price up, thinking that the big buyer will be willing to pay more. Fill or kill orders are useful in these circumstances because the investor can attempt to lock in a certain price.