IOC, FOK, and AON: Immediate-or-Cancel, Fill-or-Kill, and All-or-None are time-in-force and volume qualifiers that modify how an order is executed.

IOC, FOK, and AON

Immediate-or-Cancel, Fill-or-Kill, and All-or-None are time-in-force and volume qualifiers that modify how an order is executed.

Definition

An IOC (Immediate-or-Cancel) order must be executed immediately upon entry; any unfilled portion is cancelled rather than resting in the book. A FOK (Fill-or-Kill) order must be filled in its entirety immediately; if the full size cannot be filled at once, the entire order is cancelled. An AON (All-or-None) order can rest in the order book but will only execute when the full order size can be filled at the specified price; partial fills are not accepted. Under UMIR, AON orders do not have the same protected-order status as visible limit orders, so they do not block a trade-through. Dealers must ensure that the choice of order qualifier matches the client's instruction; using an AON qualifier on a time-sensitive order, for example, could result in the order not executing at all if liquidity is fragmented across multiple marketplaces. These qualifiers are commonly tested as part of order-handling and UMIR best-execution scenarios.

Source

UMIR 1.1 (definitions); marketplace trading rules; CIRO IDPC order-handling requirements

Where this shows up on the CIRE

Outcome 8.1

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1
A mining company executive knows that an internal assay report confirming a major ore discovery has not yet been publicly released. She calls her registrant and places a large buy order in the company's shares. Under Canadian securities law, which of the following is most accurate?
Outcome 8.1 · click for answer
A.The trade is permissible because the executive's account is at an arm's-length dealer and the order was placed verbally.
B.The executive is trading on material non-public information and the trade is prohibited under insider trading provisions of applicable securities legislation; the registrant who knowingly facilitates such a trade may also face liability.Correct
C.The prohibition applies only if the executive is a director or officer of a reporting issuer; a senior employee does not qualify as an insider.
D.The trade is permissible because the executive is buying, not selling, her own company's shares.
Insider trading prohibitions under provincial securities legislation apply to any person in a special relationship with a reporting issuer who trades with knowledge of a material fact or material change that has not been generally disclosed. Senior employees such as executives fall squarely within this definition. The prohibition applies equally to purchases and sales. A registrant who knowingly facilitates insider trading may be found to have tipped or assisted the insider, attracting their own regulatory and civil liability.
2
A client buys one call option on shares of a Canadian bank with a strike price of $130 and an expiry of three months. The current share price is $128. Which statement correctly describes the client's position at expiry if the shares are trading at $125?
Outcome 8.1 · click for answer
A.The call option expires worthless because the market price ($125) is below the strike price ($130); the client's maximum loss is the premium paid for the option.Correct
B.The client must buy shares at $130 because a call obligates the buyer to purchase.
C.The client's call is in the money and they will receive $5 per share.
D.The option converts to shares automatically because it is an American-style option.
A call option gives the holder the right; not the obligation; to buy the underlying at the strike price. At expiry with the stock trading at $125, exercising the call to buy at $130 would be economically irrational (the client could buy shares in the market for $125). An out-of-the-money call expires worthless. The buyer's maximum loss is the premium paid. A call buyer has the right to buy; a call seller (writer) has the obligation to sell. Automatic conversion to shares occurs only for deep-in-the-money options under some brokerage exercise-by-exception rules, which does not apply here.

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