What is a 'Kill'

A kill is a request to cancel a trade between its placement and its fulfillment.

BREAKING DOWN 'Kill'

Kill requests occur after a trader places an order but before it gets filled by a counterparty. Investors may wish to kill trades because of market movements that change the potential profitability of a trade, because they placed the order accidentally, or simply because they changed their mind after placing the trade.

The success of the kill depends on the type of trade and the disposition of the markets. Many trades move from placement to execution almost instantaneously thanks to computer trading, limiting the amount of time available for a successful kill. When exchanges experience heavy trade volumes, investors may also run into difficulty killing trades because timely notification about the trade’s fulfillment or cancellation can be delayed. Placing a trade makes the investor or trader liable for the order on fulfillment, regardless of whether the trader receives timely notification. Kill orders issued or received after fulfillment of a trade will not be honored, and will not change the trader’s responsibility to follow through on the placement order.

Killing Market and Limit Orders

Since a successful kill order requires a trader to submit it before the order gets fulfilled, traders have much more leeway on timing for placements which delay fulfillment or which place restrictions on fulfillment. For example, some traders who wish to fulfill a large order at a specific price will issue a fill or kill order. Depending on the exchange and the order type specified, fill or kill orders take place in a single large transaction that either fills the entire order or as much of the order as possible. In either case, the order must fill at the specified price and the unfilled balance, in whole or in part, gets killed if no counterparties come forward.

Limit orders​​​​​​​, on the other hand, specify an amount of time during which an order fulfills if the security in the trade hits a specific price point. For example, an investor may use a stop loss order to ensure a security that falls in price gets sold before it loses too much value. An investor may also use a take profit order to set a higher price point at which the investor wants a sale to take place. In either case, the order does not get fulfilled until the contingent event happens, and therefore, a trader or investor could more easily kill the trade.

RELATED TERMS
  1. Immediate Or Cancel Order - IOC

    An immediate or cancel order (IOC) is an order to buy or sell ...
  2. Fill

    A fill is the action of completing or satisfying an order for ...
  3. Cancel Former Order - CFO

    Cancel Former Order is an order from an investor to a broker ...
  4. Canceled Order

    A canceled order is a previously submitted order to buy or sell ...
  5. End of Day Order

    An end of day order is a buy or sell order requested by an investor ...
  6. Open Order

    An open order is an order to buy or sell a security that remains ...
Related Articles
  1. Trading

    Why limit orders may cost more than market orders

    Learn the difference between a market order and a limit order, and why a trader placing a limit order sometimes pays higher fees than a trader placing a market order.
  2. Investing

    Understanding Market Orders And Limit Orders

    A market order executes a transaction as quickly as possible at the present price. Immediacy is the main concern. A limit order is executed at or below a purchase or sale price. Price is the ...
  3. Investing

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
RELATED FAQS
  1. What is the difference between a buy limit and a sell stop order?

    Understand the differences between the two order types, a buy limit order and a sell stop order, and the purposes each one ... Read Answer >>
  2. How long does it take a broker to confirm a trade after it is placed?

    Learn about placing trades with a broker and the amount of time required to received confirmation of different types of orders. Read Answer >>
  3. What is the difference between a stop order and a stop limit order?

    Learn the differences between a stop order and a stop limit order. Traders use these as stop losses and regular investors ... Read Answer >>
  4. What is the difference between a buy limit and a stop order?

    Learn the difference between buy limit orders and stop orders, including stop loss orders, and understand the risks of the ... Read Answer >>
  5. When is a buy limit order executed?

    Understand how buy limit orders work, and factors such as the bid-ask spread and market volatility that traders must consider ... Read Answer >>
Trading Center