Fill or Kill (FOK) Order: An Alternative to Limit and Market Orders for Large Trades

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Summary:

  • Fill or kill orders are conditional orders that are filled instantly once the security reaches a certain price level. An FOK order must be filled at 100% within seconds or it’s automatically canceled.
  • Fill or kill orders are not the same as market orders or limit orders; market orders are filled instantly at the market rate and limit orders can be partially filled and take time to reach fulfillment.
  • The FOK order type is most commonly used to purchase large blocks of contracts. A trader can set a FOK order on Phemex and have their order filled instantly or canceled.

fill or kill order

Traders who purchase large quantities of securities or options require the fast execution of a trade at a certain price.

What happens when the regular available market orders such as limit and market orders are insufficient for the trader’s needs?

Fill or Kill (FOK) is a type of order that was designed to facilitate the purchase of large blocks of a security at a particular time–or entirely cancel the order. 

The FOK order type is available on Phemex. This guide will explain the basics of a fill or kill order and how it’s used by large players in the crypto markets.

What Is A Fill Or Kill Order?

A fill or kill order is an order that must be filled immediately at the set price based on the all-or-none (AON) principle.

This order type is preferred by big players and leverage traders who need to have large order quantities filled at a certain point; and if their requirements are not met, their orders are instantly canceled.

The FOK order type has a reputation as a more “extreme” order that adds an element of automation to a larger trading strategy.

It specifies exactly when and how much the system will purchase for us. If the order is not fully executed in a few seconds, it is then canceled.

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When to Use A FOK Order?

FOK orders are best used when we predict a large movement or change in the market dynamics.

For example, say Bitcoin is trading at $20,000 and we receive insight about momentum in the stock markets that might propel the price to $21,000 and above, in which case we will need to purchase a large block of contract options.

With a fill or kill order, we can set our target buy price at $20,100 (once BTC starts moving) and have it filled immediately, otherwise cancel the entire trade.

How To Use a Fill or Kill Order ?

The FOK order type is available as a conditional order on all spot and contract markets on Phemex.

  1. Open a chart such as the BTC/USDT perpetual futures chart, and select “Conditional” from the top orders. Conditional orders are available for all crypto assetsConditional orders are available for all crypto assets on Phemex.
  2. Scroll below to “Advanced” options below and change the “GTC” option to “FOK” in the window: Adjusting the conditional order for our fill our killAdjusting the conditional order for our fill our kill example.
  3. Specify the exact limit price, trigger price, contract quantity and click on the green “Set Buy Stop” button: Filling in the specifications for the FOK orderFilling in the specifications for the FOK order.
  4. A window will pop-up asking you to complete the trade with specifics such as take-profit and stop-loss:Verifying the FOK orderVerifying the FOK order with safety mechanisms.
  5. Confirm the trade and the FOK order will be listed under conditional orders.

Fill or Kill Order vs Immediate or Cancel

The difference between fill or kill and immediate or cancel is that an immediate or cancel order will cancel after a few seconds, but the order can fill partially in the meantime.

For example, if we’re buying 50 Bitcoin contracts using an IOC order and it’s not filled in a few seconds, there’s a chance we buy 5-10 contracts before the trade closes.

An FOK order, on the other hand, will immediately close if it’s not 100% filled to our specifications and will not purchase any more contracts. In that respect, all 50 Bitcoin contracts would have to be purchased or the order would be canceled.

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Fill Or Kill vs All or None Order

FOK orders are nearly identical to All or None (AON) orders, but the difference is that an AON order might execute at a later date and is not automatically canceled.

If we set an AON order for 50 Bitcoin contracts, it would immediately fill, or if the conditions for a 100% order delivery were not met, it would still remain active until the conditions are met at that price level again.

Comparatively, an FOK order would either fill the 50 Bitcoin contracts or it would cancel it in its entirety and the trader would have to manually re-start the trade.

Conclusion

The FOK order is a conditional order that combines limit and market trades by purchasing a large quantity on the spot once the price reaches a certain level.

If the delivery conditions are not met within a few seconds of crypto reaching the specified price, the order is automatically canceled.


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