An All-or-none (AON) order is a buy or sell order that either has to be executed entirely or not executed at all. In contrast to a regular order, where partial execution is possible, an AON order requires the broker to execute the entire order. If there are not enough shares to complete the full order, it is either not executed or remains pending until it can be fully filled or cancelled.
How All or None Orders Work
When a trader submits an AON order, they instruct that the trade can only be executed if the whole number of shares is available at the specified price. If this condition is not fulfilled, the order will be pending until it can be filled out or cancelled.
This is also referred to as a duration order, as the investor has the option of setting the duration of execution.
Important Points to Keep in Mind
- No Partial Execution – The order is only fulfilled if the full quantity is available.
- Order Cancellation – In case the condition is not fulfilled, the order is cancelled.
- Fill or Kill Orders – Both have to be completely executed, but with a fill or kill order, it is cancelled in the instant when it is not filled, whereas an AON order can also proceed.
- Price Fluctuations Do Count – If the share price of the shares in the order fluctuates upwards and downwards while the processing of the order is ongoing, then the investor’s cost would be impacted.
Conclusion
An All or None order ensures that the investors receive everything they desire or nothing. Although it prevents partial fills, it is also open to non-execution due to adverse market conditions for a full transaction.
