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← Series 7: Order Processing & Trade Settlement
Series 7 practice questionmediumOrder Types — FOK and AON

A customer places a Fill-or-Kill (FOK) order to buy 1,000 shares of JKL at $25. If only 700 shares are available at $25, what happens?

  1. A700 shares are purchased and the remaining 300 shares are cancelled
  2. BThe order is held until all 1,000 shares become available
  3. C700 shares are purchased and 300 shares are placed as a GTC order
  4. DThe entire order is cancelled immediately✓ Correct answer
Explanation

Why D — The entire order is cancelled immediately

A Fill-or-Kill (FOK) order requires that the entire order be filled immediately and completely, or the entire order is cancelled. Unlike an All-or-None (AON) order, which also requires complete execution but allows time for the full quantity to become available, a FOK order demands immediate full execution. Since only 700 of the 1,000 shares are available, the entire FOK order is cancelled.

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