All Or None - AON

DEFINITION of 'All Or None - AON'

All or none (AON) is an instruction used on a buy or sell order that instructs the broker to fill the order completely or not at all. If there are not enough shares available to fill the order completely, the order is canceled when the market closes. An AON order is considered a duration order because the investor provides instructions to the trader about how the order must be filled, which impacts how long the order remains active.


Assume, for example, an investor places an AON order to buy 200 shares of Microsoft Corporation common stock at $15 per share, which means that the order does not fill unless all 200 shares are purchased at $15. The investor has indicated both the number of shares and the price required to fill the order. Two hundred shares is a small number of shares to purchase when compared with the daily trading volume for Microsoft stock, and it is likely that order is filled if the stock trades at $15 during the day. Larger AON orders, however, are more difficult to fill, because the order is a larger percentage of the shares traded each day. While Microsoft may trade at $15 a share, it may be difficult to fill an order for 100,000 shares at $15 using an AON order.

<>Factoring in Technical Analysis>

Many portfolio managers use technical analysis, which is the study of stock price patterns and trading volume, and this strategy may require an AON order. When a stock price trades above or below a range of trading, the price may indicate a future trend. Assume, for example, that a stock trades between $20 and $25 per share for several weeks, and then the stock price increases to $27. Technical analysts describe this trading pattern as a breakout, which means that the stock price continues to increase. The portfolio manager can place an AON order, so that the entire order must fill at the $27 breakout price, which allows the manager to profit from the price increase.

Examples of Fundamental Analysis

Portfolio managers also use fundamental analysis, which involves the study of a company's financial statements and financial ratios. Managers compare the ratios of a business to similar firms in the same industry, and a ratio can serve as a buy or sell signal. Portfolio managers use AON orders to buy and sell stocks, based on fundamental analysis. Assume, for example, that the price-to-earnings (P/E) ratio for the technology section is 30 times earnings, and that Microsoft's P/E ratio is 20 times earnings ($100 stock price / $5 earnings). Because Microsoft's P/E ratio is lower, the company is generating more earnings per share, which makes the stock's current price more attractive than other firms in the industry. The portfolio manager places an AON order to purchase 5,000 shares at $100 per share since the P/E ratio indicates a buy signal.