Time-in-Force (TIF) orders are instructions appended to a trading order that specify how long the order remains active before it is automatically canceled. These parameters provide traders with control over the duration and conditions under which their orders are exposed to the market. Common TIF types include Good-Till-Cancel (GTC), Immediate-or-Cancel (IOC), and Fill-or-Kill (FOK).
Mechanism
The trading platform’s order management system processes TIF instructions upon order submission. For GTC orders, the system keeps the order active until explicitly canceled or filled. IOC orders attempt immediate execution for any available quantity, canceling the remainder. FOK orders demand full, immediate execution, canceling the entire order if not met. This mechanism dictates the order’s lifecycle within the exchange’s matching engine.
Methodology
Traders employ TIF orders to manage execution risk and achieve specific trading objectives, particularly in volatile crypto markets. For example, institutional traders use FOK to ensure full execution of large block trades at a specific price, avoiding partial fills. The methodology integrates TIF rules into algorithmic trading strategies to optimize liquidity capture, minimize market impact, and control exposure duration, aligning order placement with desired market interaction.
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