All or none (AON) is a finance term used in

investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with ...

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 Order, ORDER or Orders may refer to: * Categorization, the process in which ideas and objects are recognized, differentiated, and understood * Heterarchy, a system of organization wherein the elements have the potential to be ranked a number of ...

to buy or sell a

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a compan ...

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". An all-or-none clause in an

underwriting contract In investment banking, an underwriting contract"The Investment Banking Handbook" by J. Peter Williamson, 1988, ""Underwriting Contracts", p. 128/ref> is a contract between an underwriter and an issuer of securities. The following types of underwri ...

or investment prospectus gives a securities

issuer Issuer is a legal entity that develops, registers, and sells securities for the purpose of financing its operations. Issuers may be governments, corporations, or investment trusts. Issuers are legally responsible for the obligations of the issu ...

the right to cancel an issue in its entirety if the underwriting is not fully subscribed. AON orders are similar to

fill or kill A fill or kill (FOK) order is "an order to buy or sell a stock that must be executed immediately"—a few seconds, customarily—in its entirety; otherwise, the entire order is cancelled; no partial fulfillments are allowed. Characterized as "extre ...

(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 general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...

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.

References

Initial public offering {{Stockexchange-stub

Example

Disadvantages

See also

References