Fill Or Kill Order (FOK) Definition
A Fill Or Kill Order (FOK) in the world of cryptocurrency and finance is a client directive to a broker or exchange platform stating that an order must be executed immediately in its entirety or not at all. This order is typically used in large transactions when partial fulfillment is undesirable.
Fill Or Kill Order (FOK) Key Points
- The Fill Or Kill Order (FOK) is a type of cryptocurrency trading order that mandates immediate and complete execution of a transaction or its complete cancellation.
- FOK order does not allow partial fulfillment.
- This type of order is designed for large-scale trading to prevent potential partial order impacts.
- High volatility and illiquid markets can significantly increase the chances of a FOK order not getting filled.
What is a Fill Or Kill Order (FOK)?
A Fill Or Kill Order (FOK) is essentially a mandate issued to brokers or exchange platforms. It’s executed within the world of cryptocurrency or stock markets, in which the initiating party demands immediate and complete execution of a transaction. Unless completely filled, the order will be entirely canceled.
Why is a Fill Or Kill Order (FOK) used?
The Fill Or Kill Order (FOK) is used for large-scale orders where partial execution may significantly influence the price and lead to a less favorable execution. FOK orders are perfect for those who want to seize a beneficial market opportunity quickly before it vanishes or changes.
Where can a Fill Or Kill Order (FOK) be used?
A Fill Or Kill Order (FOK) is used on trading and exchange platforms that support this type of order. It’s commonly employed in financial markets like stocks, forex, commodities, and of course, cryptocurrencies.
When to use a Fill Or Kill Order (FOK)?
Given that a Fill Or Kill Order (FOK) needs immediate execution and the order size needs to be readily available on the order book, it should be used in markets with high liquidity and during trading hours with high activity levels. The risk of an unfilled order increases in illiquid and highly volatile markets.
How to use a Fill Or Kill Order (FOK)?
A trader can place a Fill Or Kill Order (FOK) on their selected trading platform, provided the platform offers this type of order. It’s important to analyze the market conditions and liquidity level before deciding to place a FOK order. If the market conditions are not well-suited for this type of order, it may end up being canceled, resulting in a lost market opportunity.
