All or none (AON)

Definition: An instruction to your broker that you want all of the limit order you entered to be executed at one time and price or not at all.

Example: You instruct your broker to buy 500 shares of MicroStore Corporation at $20 per share. Normally, you would not care how you acquired your shares. For example, if over the course of a few minutes five different holders of MicroStore each sell you 100 shares for $20 per share, what would it matter to you? All of this would be handled behind the scenes by your broker. All you’d know is that you have your shares at the price you specified! However, by specifying AON, you will only buy your shares if you can purchase all 500 at the same time. If this can’t be accomplished when you enter your order, your broker can come back later and try again to get the whole order filled at one time.

Investeach explains: Without AON, there is a chance that by the time your order expires, it is only partially filled. In our above example, without specifying AON, you may check your brokerage account and find that you were only able to purchase 300 shares of MicroStore at $20 per share because only 300 shares were available at $20. If you wanted to purchase the other 200 shares, you’d need to enter a new order and pay a second commission when the other 200 shares were bought for you.

Riddle me this:

1. If a broker cannot fill all of your order when it looks at the state of the market this morning, what is he or she free to do?
2. Why don’t most people care about entering their order as all or none?
3. What is a legitimate, but rarely experienced, reason that you want to enter an all or none order?

Related terms:

Limit buy order, Limit sell order.