An institutional investor submits three separate limit orders with distinct execution qualifiers to a broker-dealer during a fast-moving market session: a Fill-or-Kill (FOK) order, an Immediate-or-Cancel (IOC) order, and an All-or-None (AON) order. Which of the following statements correctly describe the execution rules and handling requirements for these order types?
- The Fill-or-Kill (FOK) order requires that the entire order quantity be filled immediately at the limit price or better; if the full quantity cannot be executed immediately, the entire order is canceled.Cevap
- The Immediate-or-Cancel (IOC) order permits partial execution immediately upon entry, and any remaining unexecuted portion of the order is canceled right away.Cevap
- CThe All-or-None (AON) order must be executed immediately upon entry, and if market liquidity is insufficient to complete the trade at that exact moment, the order is automatically canceled.
- DAny unexecuted balance of an Immediate-or-Cancel (IOC) order remains resting on the limit order book until the market close.
Cevap
The correct statements state that a Fill-or-Kill (FOK) order must be executed immediately in full or canceled entirely, and that an Immediate-or-Cancel (IOC) order allows partial fills immediately while canceling any remaining unexecuted shares.
The correct statements accurately differentiate between execution qualifiers: Fill-or-Kill (FOK) orders mandate both complete execution and immediate execution (otherwise canceled completely), whereas Immediate-or-Cancel (IOC) orders require immediate execution but permit partial fills (canceling only the unexecuted balance).
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Order Execution Qualifiers (FOK vs. IOC vs. AON)