All or none (AON) is a finance term used in
investment banking
Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by und ...
or
securities
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
transactions that refers to "an
order to buy or sell a
stock
Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...
that must be executed in its entirety, or not executed at all".
Partial execution is not acceptable; the order will execute "only if there are enough shares available in a single transaction to cover it".
AON orders are similar to
fill or kill (FOK) orders, but the former focuses on "complete vs. partial fulfillment", whereas the latter hinges on the immediacy of the transaction.
Example
If you place an AON order requesting 100 shares of JKL Co. at $2, your stockbroker will not fill that order unless they can obtain the entire 100 shares at $2; if JKL Co. shares are in such high demand that there are only 50 shares available for purchase, then you must wait until the entirety of your order, 100 shares, is available for purchase.
Disadvantages
Price
inflation
In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
is the main disadvantage of AON orders.
Continuing with the previous example, let's say that three months later, your broker informs you that all 100 shares of JKL Co. are now available for purchase, but the stock price doubled from $2 to $4. Since you did not cancel this AON order, you are then forced to buy all the 100 shares of JKL Co. at double the price you intended. Using a limit order in conjunction with the AON order will prevent this from happening.
See also
*
Fill or kill (FOK) orders
*
Immediate or cancel (IOC) orders
*
Underwriting
Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liability ...
References
Initial public offering
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