What is Kill?
In the trading world, kill refers to half of a fill or kill (broker to either fill an order immediately and completely or cancel the entire order.
How Does Kill Work?
Let's assume you want to purchase 1 million shares of Company XYZ at $20 per share. You might instruct your to "fill it or kill it," meaning that your broker should buy the entire million shares at $20 a share right now (fill it) or do nothing at all (kill it).
Fill or kill orders are not the same as immediate-or-cancel orders, which permit at least partial fulfillment of an order.
Why Does Kill Matter?
Kills occur most often when a person wants to trade a large quantity of price change that often occurs when placing traditional or limit orders for a large number of .
In our example, the rest of the market know about a market or limit order to buy a million shares of Company XYZ at $20 or better and react to the order accordingly. Traders might buy shares of Company XYZ if it is trading below $20 when you place the order or sell shares of Company XYZ if it is trading above $20 when you place the order. This can be costly to you as you wait for your to fill your entire order. To avoid this, you can instruct your broker to fill the order or kill it; he or she must essentially have a million shares worth of sellers lined up who are willing to sell at $20 per share in order to successfully execute your order. For this reason, fill or kill orders are pretty rare.