If you’re a trader, you’ve probably heard the term “AON order.” But what does that mean? And more importantly, how can you use it to your advantage in the markets? In this article, we’ll explain an AON order and provide tips on how to use it effectively. Find more info below.
What is an AON order, and what does it stand for?
An AON order is an “all or none” order. That means that when you place this type of order, you’re requesting that all of the shares you’ve specified be bought or sold at the price you’ve designated or not at all.
AON orders are placed on a trade’s buy and sell sides. So, if you’re buying 100 shares of XYZ stock at $10 per share, and you place an AON order, you’re instructing your broker to either buy all 100 shares at $10 each or don’t buy any of them. The same goes for if you were selling those same 100 shares. If you place an AON order to sell, you’re telling your broker that you either want to sell all 100 shares at $10 each or don’t sell any of them.
What are the benefits of AON orders?
There are a few key benefits to using AON orders:
- They can help you avoid partial fills. Your broker can only buy or sell part of the order because the market isn’t liquid enough to accommodate the entire order.
- AON orders can help ensure you get the price you want.
- AON orders can save you time and hassle by preventing your broker from having to call you for a “confirmation” on partial fills.
When should you use an AON order?
Now that we know what an AON order is and how it works let’s look at when it might make sense to use one. If you’re trading a large number of shares, an AON order can be an excellent way to ensure that you get the entire order filled at your desired price or none. It is especially true in illiquid markets with a risk of partial fills.
Another time when an AON order can be helpful is when trying to “time” the market. For example, let’s say you believe that XYZ stock will rise sharply in the next few days, but you don’t want to risk missing the move by waiting to enter your buy order. In this case, you could place an AON buy order at $10.50 per share. If the stock rises sharply and hits your $10.50 price target, your entire order will be filled. But if the stock doesn’t reach your target price, you’ll know that it wasn’t meant to be, and you won’t have bought any shares.
There are a few things to keep in mind when using AON orders.
First, because your broker will either fill the entire order or none of it, you need to ensure that you’re comfortable with the number of shares you’re trying to trade. Second, AON orders can take longer to fill than other orders, so you must be patient. Finally, there is a risk that your order won’t be filled at all, so make sure you’re comfortable with that possibility before placing an AON order.
All in all, AON orders can be a helpful tool for traders. Used correctly, they can help you avoid partial fills, get the price you want, and save time. Remember to use them wisely and always keep your risk tolerance in mind.
How to cancel or change an existing AON order
Now that you know what an AON order is and how it works, you may wonder how to cancel or change one. The process for doing so will vary depending on your broker, but in general, you’ll need to contact your broker directly to make any changes or cancellations.
If you’re not sure how to cancel or change an AON order with your broker, the best thing to do is give them a call and ask. They should be able to walk you through the process and answer any questions.
The Bottom Line
AON orders can help avoid partial fills and ensure you get the price you want, but they come with some risks. Overall, make sure you understand how they work before using them.