Fill or Kill order (FOK)

A fill-or-kill order is often used in trading when a trader wants to purchase or sell a large number of assets at once. For example, let's say a trader wants to buy 10,000 shares of a company's stock. They could place a fill-or-kill order to ensure that they either purchase all 10,000 shares at once or none at all.

If the current market price is $50 per share, the trader could set a limit price of $51 per share, meaning they are willing to pay up to $51 per share for the stock. The order would then be executed if the stock price drops to $51 or lower.

However, if there are not enough shares available to fill the entire order at $51 per share, the order would be cancelled and the trader would need to place a new order. This is because the order is designed to be filled completely or not at all, hence the name "fill-or-kill."

This type of order can help prevent traders from ending up with a partial position, which could result in higher transaction costs or unwanted exposure to market fluctuations. It's important to note that fill-or-kill orders can be risky in volatile markets, as the price may move quickly and the order may not be filled at all. Therefore, it's important for traders to carefully consider the market conditions before placing this type of order.

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