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Saturday, January 24, 2009

Fill-Or-Kill (FOK), Immediate-Or-Cancel (IOC) & All-Or-None (AON) Orders

The following are types of orders with attached conditions related to the ability of the broker to fulfill the quantity / size of the orders and timing of execution:

Fill-Or-Kill (FOK)
Fill-Or-Kill (FOK) order is an order (buy / sell) that must be immediately filled entirely (usually within a few seconds) at the limit price or better; otherwise, it will be totally cancelled. So, this order does not allow partial execution.

FOK orders are normally used by day traders who are hoping to scalp or take advantage of the opportunity in the market within a short duration.

Immediate-Or-Cancel (IOC)
Immediate-Or-Cancel (IOC) order is an order that must be filled immediately at the limit price or better only. If the order cannot be filled immediately or fully (i.e. only partially filled), the unfilled portion will be cancelled.

This order is different from Fill-Or-Kill (FOK) order whereby this order allows partial filling, while Fill-Or-Kill (FOK) order does not allow partial filling.

All-Or-None (AON)
All-Or-None (AON) order is an order (buy / sell) that instruct the broker to either fill the order entirely at once at the limit price or better, or do not fill it at all.

The difference between All-Or-None (AON) order and Fill-Or-Kill (FOK) / Immediate-Or-Cancel (IOC) orders is that, unlike FOK / IOC order, AON order will not be cancelled if it cannot be filled immediately, and can be used in addition to Day Order or Good Till Cancelled (GTC) order.
If the order is a Day Order, when there is not enough supply to meet the quantity requested by the order at the limit price or better, then the order will be cancelled at the close of the trading day.

For the list of other types of order, go to: Types of Orders in Trading.

Related Topics:
* A Chance to Learn from World Class Trading Experts For FREE You Should Not Miss
* Options Trading Basic – Part 1
* Options Trading Basic – Part 2
* Learning Candlestick Charts
* Learning Charts Patterns