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What is an All-or-None Order?

August 12, 2022
5
min

AON orders are executed in single transactions and are sold at the same price. It’s difficult to fill an all-or-none order especially in lightly traded penny stocks.

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Investing often requires making tough decisions, but sometimes the choices are obvious. When investors are certain that they want to buy or sell a specific number of shares they might turn to what’s known as an all-or-none order. They also can be used strategically to test the sentiment of other investors.

What is an all-or-none order? 

An all-or-none(AON) order is an order to buy or sell a stock that has to be carried out completely, or not at all. If an AON order can’t be executed, it remains active until the entire order can be filled. Or, based on the investor’s instructions, it can persist until it’s canceled, renewed, or it expires. Because the entire block of shares will be bought or sold at once in a single transaction, AONs are executed at the same price. In some cases, investors also specify a price at which they’d like to fill the order. 

AON orders are one of many conditional orders investors can make to ensure that they buy or sell under conditions that they determine in advance. Partial orders, in which a broker can’t purchase all the shares a buyer wants, won’t be filled if an AON order is in effect. Because of the potential difficulty in filling an all-or-none order, they are used less often than orders without conditions. AONs are particularly popular for trading in low-volume penny stocks that aren’t listed on exchanges.

For example, an investor wants to buy 100 shares of XYZ Corp. and places an AON order with a broker. If 100 shares can be found, the order will execute. But if the broker can only find 65 shares available for sale, the order will stand until all 100 shares are available for purchase. There is, of course, no guarantee the broker will ever find that many shares, and the order won’t be fulfilled.

The same can happen with an AON sell order. Suppose an investor wants to sell 500 shares of ABC Inc. The investor’s broker will have to find a buyer for all 500 shares, or the order won’t be executed. As with a buy AON, the order will persist until it’s filled, canceled, or expires. 

Like limit orders and stop orders, an all-or-none order is a conditional order that won’t be executed until the terms are met. AON orders are the opposite of an any-part-of order, in which a broker is instructed to execute part of the order even if the rest of the order can’t be filled.
AONs can be day orders—only good during a single trading day—or good-till-canceled orders, which are valid for months until they are revoked. Like most other types of stock orders,  all-or-none orders can be placed through a traditional broker or trading app.

How and when might investors use all-or-none orders?

All-or-none order can be used strategically to test the strength of the stock market. For example, if an all-or-none purchase order is easily filled, it suggests that current shareholders might think the stock won’t rise much or could even fall and are happy to sell. On the other hand, if the order isn’t filled, that could mean investors think the price will increase and are unwilling to sell at or near current levels.

AON orders also are often used for buying or selling so-called penny stocks—thinly traded, low-price stocks that aren’t listed on exchanges and trade directly between investors—because a partial order will result in an insignificant investment. But such orders can be difficult to fill for stocks with low volume, whether they’re penny stocks or even bigger ones that are listed on exchanges.

If an investor wants to buy or sell a certain number of shares but will settle for having some of the order filled, they may consider using an any-part-of order rather than an all-or-none order. If an any-part-of order is used, the broker would simply buy as many shares as possible.

When would investors not use all-or-none orders?

All-or-none orders often won’t be filled immediately and if investors want to buy at current prices, they risk missing out by using this type of order. 

Trying to buy a block of shares all at once, especially in thinly traded securities, is not always possible or may take some time. Prices could change drastically while a big block of shares is being found, especially for penny stocks or other thinly traded shares.

And if investors are dumping a sinking investment, that may be precisely the time a large number of shares hit the market as other investors also try to liquidate their holdings. If shares suddenly flood the market, that potentially could make an all-or-none sale even harder.

What is the difference between an all-or-none order and a fill-or-kill order?

A fill-or-kill (FOK) order combines an all-or-none order and a requirement that it be filled right away or canceled, which is known as an immediate-or-cancel order (IOC). FOK orders don’t allow for partial fills. Investors who use FOK orders want their order to be filled immediately no matter what. These orders sometimes are used when investors are concerned about price fluctuations.

FOK orders can help investors get the price they want when investing in volatile stocks. A fill-or-kill order and the related immediate-or-cancel order—which permits partial execution—contrasts with a good-till-canceled order, which persists until it’s called off. 

The bottom line

Investors use all-or-none orders when they want to buy or sell a precise number of shares and are unwilling to settle for less than that amount. They can be combined with other parameters, such as a specified price. Like most other types of orders, AON orders can be done through a broker or trading app.

Because AON orders are executed in a single transaction, they’re bought and sold at the same price. But it can be difficult to fill an all-or-none order, especially in lightly traded penny stocks—where they are especially popular. Like some other conditional stock orders, there’s a chance an all-or-none order can’t be satisfied and therefore won’t be executed.

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