It is beneficial because it gives the investor opportunities to buy or sell stocks they want at specific prices that would otherwise be unavailable. You can also read about impact of technology on financial markets for more details.
AON orders are two orders in one:
- To establish a new position – i.e., enter into a limit order concerning the quantity of the security being ordered.
- To close out an existing position – i.e., enter into a limit order concerning the quantity of the security currently held by the investor (the closing transaction).
An AON order(where (AON) is the abbreviation for all or none) does not guarantee that you will receive all of your orders. It means that you may receive less than the number of shares in your AON order if enough market sell orders exist to satisfy it.
However, cancel-and-replace orders and bracket (trading) orders are available if this happens and allow traders to either resubmit a replacement order at a higher price or do so with another quantity.
The purpose of using an AON order is to facilitate better control over when these transactions occur.
For example, if you own 100 shares of ABC Co. but want to buy 50 more, you can place an AON buy limit order for 100 shares which remains open until you decide to cancel or fill it.
How AON is Used in Accounts?
In a fee-based account, the AON order fee is 0.5% of the total value(in yen) of both branches of an AON order.
As explained in this article, there is no additional fee for placing an AON order other than the price spread and any applicable trade fees in a commission-free account.
It means that if you place an order to buy 10,000 shares of J-REITs, the current best offer is 100 @ 370 JPY per share. Your AON order will execute pending orders in the market. If your order succeeds, your unit price per share would be 371 yen.
In a fee-based account, if you were to enter a 10,000 share AON limit buy at or better than 370 JPY per share or lower, it would cost 0.5% * 10,000 * 370, which = 183 JPY.
In a commission-free account where you’re charged 7 JPY per trade up to 3 million Yen and 15 JPY for trades over 3 million Yen, it would cost 183 JPY + 2598 JPY = 2781 JPY for this particular order.
If the AON order you enter is immediately filled, you will not be charged an additional fee even if it executes at a different price than what you originally entered.
However, if the AON order remains open and is cancelled or executed at a different price than what was initially entered, your account will be charged for both orders separately.
For example, let’s say that the market conditions had changed drastically between when you placed your original order and when your order fills; let’s also assume you entered an AON buy limit of 10,000 shares with a limit price of 370 yen per share (or better). You can also learn about types of forex signals to enhance your knowledge.
If your order were filled at fewer than 10,000 shares, you would not be charged for the portion that was filled because you have already ordered for 370 or better.
However, if your order is filled with only 5,000 shares being executed, you will receive an invoice for the original order to buy 10,000 shares and the new order to buy 5,000 shares.
They also recognise AON orders in traditional market conditions where there are pending orders available when yours is entered.
It should be noted that when limit buy (or sell), AON orders are entered without pending orders in the market, J-Com is recognised during these sessions:
- Pre-opening session – i.e., between 12:00 AM – 09:00 AM for both Tokyo and New York sessions.
- After-hours session – i.e., between 4:00 PM – 9:00 PM for the NY trading session, 4:00 AM to 10 AM for New Zealand open time, 3 AM-12 PM for Australia available time, 1 AM-10 AM for Tokyo trading session and 2 PM – 11 PM for Hong Kong trading hours.
In other words, day orders entered during those times will be processed as an AON order and not as a regular limit order. For more information, click on foreign stocks.