timothy sykes logo

Trading Tips-Tim Sykes Penny Stock

Fill-or-Kill Order: What It Is, How to Execute One, + Examples

Timothy SykesAvatar
Written by Timothy Sykes
Updated 8/25/2021 11 min read

Fill-or-Kill Order: Key Takeaways

  • How FOK orders can help you become a self-sufficient trader…
  • What you can learn from my mistakes to make smarter trading choices.
  • The next step in your day trading education journey…

Learn the strategies that kept me in the game — and profitable — for 20+ years*

Fill-or-kill orders are one of many tools successful traders use. But are they right for you? Knowing which orders best fit your trading strategy is crucial to making safer trades. I’ve missed entries on plays before because I entered the wrong order. Don’t let that happen to you!

Let’s dive in…

What Is a Fill-or-Kill Order (aka FOK Order)?

© Millionaire Media, LLC

It’s a buy or sell order that a broker must execute immediately in its entirety or cancel. A fill-or-kill order is all or nothing.

Traders often use these orders to open a position without influencing a stock’s price.

Let’s say you place an order to buy a bunch of shares, but none are available. That creates demand that will sit on the Level 2 and likely push the price of the stock higher.

If you’re new to trading, Level 2 is a tool I use every day to get in and out of stocks safely. Watch my “Learn Level 2” DVD to learn how I use this tool.

Fill-or-kill orders can be useful when you use them correctly. But there are many other order types you can place. You need to learn which will fit your trading strategy best first.

Types of Orders: FOK vs. IOC vs. GTC

To be a self-sufficient trader, you need a solid understanding of the different order types available. It’s part of finding a system that works for you.

Depending on your strategy, you’ll likely end up trading with one of the following orders…

Fill-or-Kill Order

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

Like I said before, the FOK fills your entire order or not at all. It only takes a few seconds.

I don’t usually use this kind of order because I trade sketchy penny stocks that are notoriously illiquid. Fill-or-kill orders are tough to execute when there are few outstanding shares.

It’s important you know that if you want to trade illiquid stocks using FOK orders. You could spend an entire day submitting orders that won’t get executed.

Immediate or Cancel (IOC) Order

An IOC is similar to a FOK with one major difference — it can fill all, some, or none of the requested shares.

Like FOK orders, IOCs happen quickly. It usually takes just a few seconds to know whether your broker can fill the order. They’ll fill as much of the order as possible and cancel the rest.

Good Till Canceled (GTC) Order

This is my go-to type of order. The name is pretty self-explanatory. Brokers fill the order at the specified price until it’s complete.

If your broker can’t fill the full order, you’ll have to decide whether to cancel the remaining shares or wait.

When GTC orders are partially filled, traders can typically wait a bit longer to see if their broker can fill the rest … They usually can.

Some traders like GTC orders because they allow buying at a certain price point. So you don’t need to be first to a trade or fill an entire position. Sure, it’s nice to have every order filled in its entirety right away, but that’s not realistic.

Every trade is different. GTC orders can give some wiggle room to open positions on sketchy stocks. Trading sketchy penny stocks is my trading strategy. Find what works for you.

Fill-or-Kill Order Examples

Tim Sykes checking his top penny stocks list in Italy
© Millionaire Media, LLC

Let’s go through some FOK order hypotheticals. It’s good to put numbers behind the definition.

Example 1

Let’s say stock XYZ trades at $5.20. You’d like to buy 10,000 shares at the current price but don’t want a partial fill. You want the shares immediately.

So you choose a fill-or-kill order. But when you try to execute it, your broker only finds 5,000 shares available. A few seconds go by … there are no other shares in the market. The order cancels.

You could have filled half your position, but your order type was all or none of the 10,000 shares at $5.20. So you get none.

FOK Order Example 2

Let’s look at the same example with a key difference. Again, you place a FOK order to buy 10,000 shares of stock XYZ at $5.20.

This time your broker finds 12,000 shares available. Within a few seconds, your entire order fills, and 2,000 shares remain in the market at $5.20. Congrats, you completed a successful order.

How Long Does a Fill-or-Kill Order Last?

FOK orders are immediate. So expect your order to last just a few seconds.

Traders who use this order type don’t want to sit around all day and expose their positions. They want to buy several shares of one stock and don’t want other traders to notice. That could influence the stock’s price and ruin the entry point.

How Do You Place a Fill-or-Kill Order?

Before you place an order, first choose the type — market or limit.

Market orders fill at the best possible price. That sounds nice … but it really means your broker gets to choose. That’s why I always use limit orders. My orders get filled at the price I want or not at all.

Placing a limit order is relatively simple. First, select a limit type order and then choose fill-or-kill.

Here’s a screenshot of what that looks like from StocksToTrade.**

Fill-or-kill order example from the StocksToTrade platform (Source: StocksToTrade.com)

Your broker might offer different order types, so check before trading.

Fill-or-Kill Orders and Stock Trading

It’s critical that you pay attention to the type of order you use when you trade. I’ve missed plays before because I had used the wrong order type and couldn’t get filled. It’s frustrating.

Learn from my mistakes and double-check your order before you make a trade. The stock market is no place to wander around without a clue of what’s going on.

The penny stocks niche is volatile and risky. Yours may be different, but you can still blow up your account if you don’t know what you’re doing or don’t pay attention.

Fill-or-Kill Orders: Frequently Asked Questions

What Is a Fill-or-Kill Order?

A FOK is an order type that fills all or none of your position instantly.

What Is a Limit Fill-or-Kill Order?

FOK orders are limit orders. That means traders set the price they want, and brokers have to complete the order at the specified price or better. If the broker can’t execute the full order as requested, the order’s canceled.

What Is the Difference Between Fill-or-Kill and Immediate or Cancel?

A FOK order ensures your whole position is either filled or canceled immediately. An immediate-or-cancel order is just as quick, but it can be partially filled. Your broker will fill as many shares as possible and cancel the rest.

The Wrap on Fill-or-Kill Orders

See why order types are so important? Day trading is risky. You can easily blow up your account if you don’t know what you’re doing. So learn as much as you can about the stock market — including order types.

Education should be your #1 priority. I’ve been trading for over 20 years and teaching for more than 10. I know now that the truly successful traders are the ones who take studying seriously.*

That’s why I started the Trading Challenge. It’s a place for people to get serious about their trading education. If you think it’s right for you, apply. But note that I don’t accept just anyone. You must prove you can put in the work.

That’s what it takes in this niche. If you’re not prepared, the market will humble you.

I see it happen over and over. Some newbie gets cocky and starts gunslinging. They think they know what to do and take big position sizes on sketchy plays. That’s a losing equation. Sooner or later, they discover that the hard way.

So learn from my mistakes and my successes. Take the time to learn now and thank me later.

What do you think about fill-or-kill orders? Do you use them? Let me know what order types you prefer to use. I love to hear from all my readers!

Disclaimers

*This level of successful trading is not typical and does not reflect the experience of the majority of individuals using the services and products offered on this website. From January 1, 2020, to December 31, 2020, typical users of the products and services offered by this website reported earning, on average, an estimated $49.91 in profit. This figure is taken from tracking user accounts on Profit.ly, a trading community platform. Timothy Sykes has a minority shareholder interest in the platform.

****Tim Sykes has a minority ownership stake in StocksToTrade.com.


How much has this post helped you?


Leave a reply


Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (205) 851-0506 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”