When setting an order, a trader can choose different 'Time in Force' strategies to set the effective execution method of the order. Order execution strategies allow traders to have more control over their trading strategies.
Bybit offers three different 'Time in Force' order execution strategies for limit orders.
Good till cancelled (GTC): The order will remain valid until it is fully executed or manually cancelled by the trader. GTC is suitable for traders who are willing to wait for all contracts to be completed at a specified price and can flexibly cancel unconcluded contracts at any time.
Fill or Kill (FOK): The order must be immediately executed at the order price or better, otherwise, it will be completely cancelled and partially filled contracts will not be allowed. This execution strategy is more commonly used by scalping traders or day traders looking for short-term market opportunities.
Immediate or Cancel (IOC): The order must be filled immediately at the order limit price or better. If the order cannot be filled immediately, the unfilled contracts will be cancelled. IOC is usually used to avoid large orders being executed at a price that deviates from the ideal price. With this set, the contracts that fail to trade at the specified price will be cancelled.
Example of a 'Time in Force' order execution strategy: A trader wants to buy 10,000 contracts immediately, but the execution price cannot exceed USD 8,001. The current market situation is shown in the following figure:
Market Order Book:
|Order Book||Market Depth||0.5|
|Last Traded Price: $8000 Mark Price: $8050|
Time in Force execution methods:
|Time in Force:||Order Quantity:||Order Price:||Executed Order Quantity:||Average Entry Price:||Unfilled Quantity:|
|GTC||10,000||$8,001||5,000||$8,001||5,000 (Order will be placed in the order book to await execution)|
|FOK||10,000||$8,001||0||0||10,000 (Order cancelled)|
|IOC||10,000||$8,001||5,000||$8,001||5,000 (Order Cancelled)|
Ⅰ. If the trader uses GTC to execute the order, then 5,000 contracts will be executed immediately, and the remaining 5,000 contracts will be entered into the order book to queue, as shown in the figure above.
Ⅱ. If the trader uses FOK to execute the order, and since there are currently less than 10,000 contracts that can be transacted in the order book, no contract will be executed and the order will be cancelled.
III. If the trader uses IOC to execute the order, 5,000 contracts will be filled at $ 8,001 and the remaining unfilled orders will be cancelled.