Futures trading offers a wide array of tools and order types that empower traders to execute strategies with precision. Among these, FOK (Fill or Kill) and FAK (Fill and Kill, but partial fill allowed) stand out as essential time-in-force instructions used to manage trade execution under specific market conditions. These order types are particularly valuable in fast-moving or low-liquidity environments where timing and control over execution are critical.
This article dives deep into what FOK and FAK orders are, how they function, their key differences, and the practical scenarios in which each should be applied. Whether you're a beginner learning the ropes or an experienced trader refining your strategy, understanding these order types can significantly improve your trading efficiency and risk management.
What Is a FOK (Fill or Kill) Order?
A Fill or Kill (FOK) order is an instruction that requires the entire quantity of a trade to be executed immediately upon submission — otherwise, the entire order is canceled. There is no room for partial fills.
Key Characteristics of FOK Orders
- Immediate Execution Required: The system attempts to match the full size of the order at the specified price the moment it hits the market.
- No Partial Fills Allowed: If only part of the order can be filled, the whole order is rejected.
- High Precision: Ideal for large institutional trades where incomplete execution could disrupt strategy or expose traders to unwanted risk.
👉 Discover how advanced order types like FOK can enhance your trading precision
For example, if a trader places a FOK buy order for 100 contracts at $50 each, the system will only execute the trade if 100 contracts are available at that price right away. If only 70 are available, none will be bought — the order vanishes instantly.
This makes FOK orders best suited for markets with high liquidity and when traders need certainty about position size upon entry or exit.
What Is a FAK (Fill and Kill) Order?
Unlike FOK, a Fill and Kill (FAK) order allows partial execution. When placed, the system immediately fills as much of the order as possible at the specified price, then cancels any unfilled portion.
Key Features of FAK Orders
- Partial Execution Permitted: Some of the order may go through even if full volume isn’t available.
- Immediate-or-Cancel Nature: Unmatched portions are discarded immediately — not left open in the order book.
- Greater Flexibility: Offers a balance between speed and completion likelihood, especially useful in volatile or thin markets.
For instance, a sell order of 100 contracts using FAK might result in 60 contracts being filled instantly at the target price, while the remaining 40 are canceled. This avoids leaving a lingering order that might later execute at a less favorable price due to market movement.
Comparing FOK vs FAK: When to Use Which?
| Feature | FOK Order | FAK Order |
|---|---|---|
| Full Fill Required | ✅ Yes | ❌ No |
| Partial Fill Allowed | ❌ No | ✅ Yes |
| Speed of Execution | Immediate | Immediate |
| Best For | High-precision trades, large blocks | Fast execution with flexibility |
| Risk of Non-Execution | Higher (especially in low liquidity) | Lower (partial fill accepted) |
While both orders emphasize immediacy, FOK prioritizes completeness, whereas FAK prioritizes actionability. Choosing between them depends on your trading goals:
- Use FOK when entering or exiting large positions where partial fills could skew your exposure or violate risk parameters.
- Use FAK when you want to act quickly in fast-moving markets but still capture whatever liquidity is immediately available.
Exchange-Specific Rules for FOK and FAK Orders
Different exchanges in China have varying policies regarding the use of these advanced order types:
Shanghai Futures Exchange (SHFE)
- Allows both FOK and FAK, but only in conjunction with limit orders.
- Cannot be used during auction periods; valid only during continuous trading sessions.
China Financial Futures Exchange (CFFEX)
- Limit orders may include FOK or FAK attributes.
- Market orders use specialized variations such as “best bid/ask immediate-or-cancel” or “immediate-or-pending-as-limit,” which serve similar purposes.
Dalian Commodity Exchange (DCE)
- Both market and limit orders can carry FOK or FAK modifiers, offering greater flexibility.
- Supports immediate execution logic across multiple product lines including agricultural and industrial futures.
These rules reflect a broader trend toward giving professional traders more granular control over execution quality — especially important in algorithmic and high-frequency trading environments.
👉 Learn how top traders leverage FAK and FOK orders for optimal execution
Practical Applications in Real Trading Scenarios
Let’s explore two real-world examples:
Scenario 1: Using FOK in Low-Liquidity Conditions
A hedge fund wants to short 500 contracts of a less-traded metal futures contract. To avoid distorting the market or accumulating unintended exposure, they use a FOK order at a specific price. Since liquidity is thin, the full 500-lot order doesn’t fill — so it gets canceled. This prevents an unbalanced position and allows the trader to reassess timing without accidental execution.
Scenario 2: Using FAK During News Volatility
Ahead of an economic data release, a trader sets a FAK buy order for crude oil futures. As prices gap up on news, only half the order fills instantly at the desired level — the rest is canceled. Although not fully executed, the trader gains partial exposure at a known price, avoiding slippage on the remainder.
These cases highlight how proper use of time-based orders enhances discipline and reduces emotional decision-making.
Frequently Asked Questions (FAQ)
Q: Can I use FOK or FAK with market orders?
A: It depends on the exchange. On DCE, yes — both market and limit orders support these attributes. On SHFE and CFFEX, they’re generally limited to limit orders only.
Q: Are FOK and FAK available during pre-market or closing auctions?
A: No. Most exchanges prohibit these orders during auction periods due to price discovery mechanics. They’re typically restricted to continuous trading hours.
Q: Do retail traders benefit from using FOK/FAK?
A: Absolutely. While often associated with institutional use, retail traders dealing in fast markets (like energy or grains) can reduce slippage and gain better control using these tools.
Q: Is there a risk of missing opportunities with FOK?
A: Yes — because FOK demands full execution, it carries a higher chance of non-fill, especially in illiquid contracts. Traders should assess liquidity before relying on this type.
Q: How do I set FOK or FAK on my trading platform?
A: Look for "Time in Force" or "Order Type" options when placing a limit order. Selecting “FOK” or “FAK” will apply the respective behavior — consult your broker’s interface for exact labels.
Final Thoughts: Mastering Execution for Better Results
Understanding FOK and FAK orders isn’t just about knowing definitions — it’s about applying them strategically. In modern futures trading, execution quality directly impacts profitability. By choosing the right order type for the right situation, traders protect themselves from unintended risk, avoid poor fills, and maintain tighter control over their strategies.
Whether you're navigating high-frequency environments or managing large positions, incorporating FOK and FAK into your toolkit can make a measurable difference in performance.
👉 Start applying smart order strategies today — explore powerful trading tools now
Core Keywords: futures trading, FOK order, FAK order, order types, trade execution, liquidity management, risk control, limit order