For many active traders, speed is key when placing a big order to make sure the entire position is bought or sold at the same price. To make sure that happens, they’ll tell the brokerage to make it a “fill or kill” order.

In this guide, we'll explain what a fill or kill order is, how it works, and what sets it apart from similar order types. 

Overview: What is a Fill or Kill Order?

Time is an important factor when placing a trade through a broker or an electronic trading platform. Larger orders can take longer to fulfill, and during that time, prices can fluctuate, especially in a volatile market. 

A fill or kill order (FOK) is a conditional time-in-force designation that tells a broker the period of time in which the order will be good before it expires. Either the broker executes it immediately and all at once at a specific price, or it’s cancelled.

An FOK order is essentially a mix of two other kinds of orders:

• Immediate or cancel (IOC): An order that prioritizes timing. The broker cancels it if it’s not implemented immediately upon arriving on the exchange.
• All or nothing (AON): It requires 100% fulfillment and complete execution or no execution at all. However, it does not require immediate execution. 

When a broker meets the conditions for IOC and AON together, it meets the conditions for the FOK order.

How Fill or Kill Orders Work

Assume you want to buy 100,000 shares of XYZ stock at $10 per share, and you want to do it immediately. You don’t want to buy fewer or more shares, and you don’t want to buy them at a higher or lower price. You want to execute the transaction at an exact moment; no partial fills or deviations can occur. You request a fill or kill order from your broker who has two options:

1. To fill it (execute and process the order) or

2. Kill it and cancel the order.

The idea behind a fill or kill order is to ensure that you won’t get a partial fill or an execution at a slightly different price. It either goes the way you want or not at all. If the broker fails to fill the entire order, the transaction does not occur.

Best Online Stock Brokers

Several online brokerages offer fill or kill orders at competitive rates, making them ideal if you’re looking for quick order implementation and control over fulfillment. 

Final Thoughts: Mastering Fill or Kill Orders for Better Trading Outcomes

The fill or kill order is a powerful tool where it’s all or nothing. However, it is not suitable for all investors and all trading strategies. Understanding how it works, along with other order types, is essential to building a strong investment plan. 

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