What Is the Execution Risk Associated with Using a TIF Instruction in an Illiquid Market?

In an illiquid market, using a restrictive Time in Force (TIF) instruction like Fill-or-Kill (FOK) or Immediate-or-Cancel (IOC) significantly increases the risk of non-execution. Since there is limited liquidity, an FOK order is unlikely to be filled entirely, and an IOC order may only receive a small partial fill.

This forces the trader to resubmit orders repeatedly, increasing transaction costs and potentially missing the desired price move.