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

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.

What Is a “Honeypot” Scam and How Is It Related to a Rug Pull?

What Is the Primary Limitation of the SPAN Margin System?

How Does an ‘Immediate or Cancel’ (IOC) Order Differ from a ‘Fill or Kill’ (FOK) Order?

What Is ‘Slippage’ and How Is It Magnified by the Wider Spreads Found in Illiquid Altcoin Markets?

In What Scenario Would a Trader Prefer an FOK Order over an IOC Order?

How Can a Trader Combine a Stop-Limit with a Time-in-Force Instruction?

How Can a Trader Use a “Time in Force” Instruction to Mitigate Volatility-Induced Slippage?

How Does a “Stop Limit” Order Combine a TIF Concept with Price Control?

Glossar

Illiquid

Valuation ⎊ Illiquidity in cryptocurrency, options, and derivatives manifests as a divergence between marked-to-market prices and intrinsic value, often amplified by limited arbitrage opportunities and information asymmetry.