FINRA Series 7Processes and Confirms TransactionsMedium
A customer wants to buy 5,000 shares of a thinly traded stock but insists that the entire order be executed in one transaction — partial fills are unacceptable. The customer does not require immediate execution and is willing to wait for the full quantity to be available. Which order type should the representative enter?
- AAll-or-none (AON) order
- BMarket order
- CFill-or-kill order
- DImmediate-or-cancel order
Show answer & explanationAnswer & explanation
Correct answer: A. All-or-none (AON) order
An all-or-none order requires that the full quantity be executed in a single transaction, but unlike fill-or-kill, it does not require immediate execution — it can remain open and wait for a matching full-size execution.
Why the other options are wrong
- B. A market order would execute immediately, likely resulting in multiple partial fills.
- C. FOK demands immediate full execution or cancellation — the customer here is willing to wait.
- D. IOC requires immediate execution of any available portion and cancels the rest — the opposite of AON.
All-or-None (AON) Order
An order requiring the entire quantity be executed in a single transaction, but with no time constraint — it can remain outstanding until fully executable.
- No partial fills allowed
- Can remain open (not immediate)
- Contrast with FOK, which must execute immediately or cancel
Memory trick: AON = All or nothing, but I'll wait (patient); FOK = All or nothing, right now (impatient).