An investor is reviewing order execution qualifiers and time-in-force instructions with a registered representative. Which of the following statements regarding Immediate-or-Cancel (IOC) and Fill-or-Kill (FOK) orders are correct?
- An Immediate-or-Cancel (IOC) order allows partial execution, with any unexecuted portion of the order being immediately canceled.Answer
- A Fill-or-Kill (FOK) order requires immediate execution of the entire order, or the entire order is canceled.Answer
- CA Fill-or-Kill (FOK) order permits partial execution, leaving any unfilled portion active until the end of the trading day.
- DAn Immediate-or-Cancel (IOC) order automatically converts into a Good-Til-Canceled (GTC) order for any unfilled shares.
Answer
An Immediate-or-Cancel (IOC) order allows partial fills with the unexecuted remainder canceled immediately, while a Fill-or-Kill (FOK) order requires an immediate fill of the entire quantity or complete cancellation.
Immediate-or-Cancel (IOC) instructions accept partial fills while canceling any unexecuted balance immediately. Fill-or-Kill (FOK) instructions require the complete order to be executed immediately, canceling the entire order if a full fill is impossible.
Step-by-Step Solution
Key Concept
Time-in-Force qualifiers (Immediate-or-Cancel vs Fill-or-Kill)