FOK order type: can they be market or limit orders?

Question

It is mentioned in SEC web page:

A Fill-Or-Kill order is an order to buy or sell a stock that must be executed immediately in its entirety; otherwise, the entire order will be cancelled (i.e., no partial execution of the order is allowed).

So FOK is essentially executed immediately AND in its entirety, else cancelled. What I am confused is, can a FOK order be also a limit order, or a market order? Market order are always executed immediately, so unless there exist a situation for market orders to be partially fulfilled (does it get partially fullfilled?) market order is equivalent to FOK. In case of limit order, by definition it need not be immediate, so a FOK limit order is incosistent (unless the quoted limit price is exactly euqual or better than the current price). Does it even make any senset to mix of FOK and market/limit order, or are they mutually exclusive or incompatible ?

Please clear my misunderstanding.

Answer 1

The SEC reference document (PDF) explains order types in more detail.

A fill-or-kill order is neither a market order nor a limit order; instead it's something in between.

A market order asks to be filled at the best available price, whatever that price might be when the order gets to the exchange. Additionally, if there are not enough counterparties to fill the order at the best available price, then part of the order may be filled at a worse price. This all happens more or less immediately; there's no way to cancel it once it has been placed.

A limit order asks to be filled at a particular price, and if no counterparties want to trade at that price right now, then the order will just sit around all day waiting for someone to agree on the price; it can be canceled at any time.

A fill-or-kill order asks to be filled at a particular price (like a limit order), but if that price or a better one is not currently available then the order is immediately canceled. It does not accept a worse price (the way a market order does), nor does it sit around waiting (the way a limit order does). Since the exchange computes whether to "fill" or "kill" the order as soon as it is arrives, there's also no way to cancel it (like a market order).

Answer 2

You can do FOK on both market and limit orders.

Normal market orders will partial fill if you want more shares than are being offered, or if someone pulled their order before you get there and now there are fewer shares than you placed a trade for.

With a FOK limit order not at the BBO you are shooting in the dark for a quick match, most of the time it does not fill. This is a commonly used order type for UHFT arbitrage. Some exchanges will not attempt to cross it for a match if its price is not at, or better than the market price.

When the FOK limit order is at the BBO it is essentially a FOK market order.

FYI: Sometimes you have a minimum quantity to fill option, so you can let the order sit on the book until it fills or you cancel.