How Does the ‘Time in Force’ Parameter Affect Slippage Risk for a Large Order?
'Time in Force' (TIF) is an instruction that dictates how long an order remains active before it is canceled. TIF parameters like 'Fill-or-Kill' (FOK) or 'Immediate-or-Cancel' (IOC) demand immediate execution, which, for a large order, can increase slippage by forcing the trade to consume all available liquidity rapidly.
A TIF of 'Good-Til-Canceled' (GTC) allows the order to sit on the book, reducing immediate slippage risk but increasing opportunity cost.