What do GTC, FOK, and IOC mean?
Dear WEEX User, Hello!
What are the Order Execution Strategies GTC/FOK/IOC?
When placing limit/conditional limit orders, traders can choose different order execution strategies to set the validity period and execution method of the orders. Order execution strategies allow traders to better control their trading strategies.
WEEX offers three different order execution strategies.
-
Good Till Cancel [GTC]: The order remains effective until it is fully executed or manually canceled by the trader. GTC is suitable for traders who are willing to wait for all futures to be executed at the specified price and can flexibly cancel unexecuted futures at any time.
-
Fill or Kill [FOK]: The order must be immediately fully executed at the order price or a better price, otherwise, it will be completely canceled, with no partial execution allowed. This execution strategy is more commonly used by scalpers (traders who make quick, small profits) or day traders looking for short-term market opportunities.
-
Immediate or Cancel [IOC]: The order must be executed immediately at the limit price or a better price. If the order cannot be immediately fully executed, the unexecuted portion will be canceled. IOC is typically used to avoid large orders being executed at prices far from the ideal price. With this setting, the portion that cannot be executed at the specified price will be canceled.
Order execution strategy example:
A trader wants to immediately buy 10,000 futures, but the transaction price must not exceed $8,001. The current market trading situation is as shown in the figure below:
| Market Depth | ||
|---|---|---|
| Order Price | Quantity | Cumulative |
| 8003 | 3000 | 13000 |
| 8002 | 5000 | 10000 |
| 8001 | 5000 | 5000 |
| Latest Market Price: 8000 Mark Price: 8050 | ||
| 8000 | 4000 | 4000 |
| 7999 | 5000 | 9000 |
| 7998 | 8000 | 17000 |
| Order Execution Strategy | Order Quantity | Order Price | Executed Futures Quantity | Average Execution Price | Unexecuted Futures Quantity |
|---|---|---|---|---|---|
|
GTC (Good Till Cancel) |
10,000 | 8,001 | 5,000 | 8,001 | 5,000 Futures enter the order book waiting to be executed |
|
FOK (Fill or Kill) |
10,000 | 8,001 | 0 | 0 | 10,000 Futures canceled |
|
IOC (Immediate or Cancel) |
10,000 | 8,001 | 5,000 | 8,001 | 5,000 Futures canceled |
- If the trader uses the GTC execution strategy, then 5,000 futures will be immediately executed, and the remaining 5,000 futures will enter the order book, waiting to be executed, as shown in the figure above.
- If the trader uses the FOK execution strategy, since there are currently fewer than 10,000 futures available in the order book, no futures will be executed, and the order will be canceled.
- If the trader uses the IOC execution strategy, then 5,000 futures will be executed at the price of $8,001, and the remaining unexecuted orders will be canceled.
Gainers
