Legal Definitions - all-or-none order

An all-or-none order is a specific instruction given to a broker or financial intermediary to buy or sell a particular quantity of securities (such as stocks, bonds, or options) with the strict condition that either the entire specified amount must be executed, or no part of the order should be filled at all. This means that partial execution of the order is not permitted. If the full quantity cannot be traded at the desired price or within the specified conditions, the order remains unfilled.

Here are some examples to illustrate this concept:

• Stock Purchase: An individual investor wants to acquire a significant stake in a company and places an all-or-none order to buy 1,000 shares of Company Z at a specific price.

  Explanation: If only 700 shares of Company Z are available at that price, the order will not be partially filled. The investor's instruction dictates that they must receive all 1,000 shares or none at all. The order will remain open until all 1,000 shares can be purchased at the specified terms, or it is canceled.

• Bond Sale: A pension fund manager needs to liquidate a block of 500 municipal bonds to rebalance their portfolio. They issue an all-or-none order to sell all 500 bonds at a minimum acceptable price.

  Explanation: If a potential buyer only offers to purchase 350 of the bonds at the fund manager's desired price, the order will not proceed. The fund manager's instruction ensures that the entire block of 500 bonds must be sold together, preventing a fragmented sale that might complicate their portfolio rebalancing.

• Options Trading: A sophisticated trader wants to close out a position by selling 20 options contracts for a particular underlying asset. They place an all-or-none order to sell all 20 contracts.

  Explanation: If the market can only absorb 15 of these contracts at the trader's desired price, the order will not be executed. The trader insists on selling all 20 contracts simultaneously to fully exit their position, rather than leaving a smaller, potentially undesirable, partial position open.