Fill or Kill Order - Algoine

As an algo trader, you may have come across the term "fill or kill order" in your trading journey. In this blog post, we'll explore what this type of order is, how it works, and when it may be beneficial to use.

What is a Fill or Kill Order?

A fill or kill order, also known as an FOK order, is a type of order that is placed by a trader in the hope of getting the desired quantity of an asset at a specific price or better. The condition that comes with the order is that if the order cannot be filled in its entirety at the specified price, it will be canceled.

In other words, the FOK order can only be executed as a complete and immediate transaction. If it cannot be executed in full, it will not be executed at all, and the order will be canceled.

How Does a Fill or Kill Order Work?

When a trader places a fill or kill order, they must specify the price at which they want to buy or sell the asset and the quantity they want to purchase or sell. If the order cannot be filled entirely at the specified price, it will be canceled, and the trader will have to take another action to purchase or sell the asset.

For instance, if a trader wants to buy 100 shares of XYZ stock at $10 per share, they can place a fill or kill order. If the order can be executed at the specified price, they will receive all 100 shares. But, if the order cannot be filled entirely, for instance, only 50 shares can be bought at $10 per share, the remaining 50 shares will not be purchased, and the order will be canceled.

When to Use a Fill or Kill Order?

The fill or kill order is beneficial for traders who are looking for immediate execution of their trades while minimizing the risk of slippage. If a trader wants to buy or sell a considerable amount of an asset, using a fill or kill order can provide certainty that the entire order will be executed at a pre-determined price or better.

However, it's worth noting that using a fill or kill order can limit a trader's flexibility since the order must be filled immediately or canceled. If the order is canceled, the trader must place a new order to purchase or sell the asset, which can result in missing out on opportunities in the market.

Conclusion

A fill or kill order is a type of order that executes an entire trade immediately, or cancels it if it can't be executed entirely. It's a useful tool for traders who require immediate execution of their trades and want to minimize the risk of slippage. However, it can limit a trader's flexibility since the order must be executed or canceled immediately.

At Algoine, we provide a platform that facilitates algorithmic trading for both professional traders and investors. Our platform is suitable for both spot and USDT-M Futures market types.

Ready to start your algo trading journey? Create an account with us today and take advantage of our innovative platform!