All-or-None (AON) Order
A trade order that must be executed in its entirety or not at all, preventing partial fills.
AON orders are particularly useful for investors with large positions who want to avoid the transaction costs associated with multiple partial fills. However, the 'all-or-none' constraint makes execution more difficult, especially in low-liquidity markets, as the broker must find a counterparty willing to take the entire size of the order. In the context of algorithmic trading, AON is a basic execution instruction used to manage position sizing precisely.
graph LR
Center["All-or-None (AON) Order"]:::main
Rel_atomic_delivery["atomic-delivery"]:::related -.-> Center
click Rel_atomic_delivery "/terms/atomic-delivery"
Rel_pub_sub_messaging["pub-sub-messaging"]:::related -.-> Center
click Rel_pub_sub_messaging "/terms/pub-sub-messaging"
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🧒 Explain Like I'm 5
Imagine you want to buy a whole box of 12 donuts. You tell the baker, 'I'll only buy if you have all 12. I don't want just 2 or 5.' That's an All-or-None order.
🤓 Expert Deep Dive
From a market microstructure perspective, AON orders impact the order book by being 'hidden' or resting as private instructions depending on the exchange's matching engine rules. While they protect against fragmented fills and 'dust' positions, they significantly increase the probability of non-execution (execution risk). Sophisticated execution algorithms often simulate AON behavior using 'Fill-or-Kill' or 'Immediate-or-Cancel' bursts to minimize market impact while seeking deep liquidity.