| If you are an investor who relies heavily on | | | | so you would only presently be investing |
| penny stocks, the all-or-none order (AON) is | | | | $600,000 if the stocks were available. |
| extremely important. The AON order works to | | | | So, now you play the "waiting" game to see if |
| safeguard your purchase by providing the | | | | other people who own stocks in Applebee's are |
| guarantee that you either receive every single | | | | willing to sell them. Finally, after 2 years of waiting, |
| stock that you requested or none at all. This type | | | | your stockbroker contacts you with the good |
| of order can problematic when a particular | | | | news that all 3000 shares of Applebee's stock are |
| company lacks the cash to stand behind their | | | | available. And, even better news, each stock has |
| stocks or a limit has been placed on the order. | | | | dropped $50 in price. That means that instead of |
| All-or-none orders are the lowest priority of your | | | | investing $600,000 for 3000 shares of Applebee's |
| stockbroker therefore, this type of transaction is | | | | stock, you only have to invest $450,000! If you |
| executed last, so when your broker finally | | | | budget allows, that leaves you with $150,000 to |
| attempts to execute this order, there must be | | | | invest into another stock. |
| enough stocks available to buy or the order is null | | | | Now, there are two huge disadvantages of |
| and void. Therefore, your all-or-none order will not | | | | all-or-none orders, the first one being price |
| be filled until there is enough stock available no | | | | inflation. For example, you would like to purchase |
| matter how much time elapses before purchase | | | | 4500 shares of stock from Southwestern Bell, a |
| of an AON order is accomplished. | | | | phone company. So, again, you contact your |
| In order to better clarify this type of order, an | | | | broker with this decision. You broker informs you |
| example is provided. Let's say that you put in an | | | | that there are only 2500 shares of stock available |
| order to buy 2500 shares of stock from | | | | from Southwestern Bell, however, that it would |
| Wal-Mart, however, because Wal-Mart stocks are | | | | be wise to place an all-or-none order because |
| in such high demand, only 1000 shares are | | | | these stocks seem to steadily increase in profit |
| available for purchase. If you place an all-or-none | | | | and lower in price per stock. So, you follow |
| order on the Wal-Mart shares, then you must | | | | through with this. |
| wait until 2500 shares are available for purchase. | | | | About 9 months later, your stockbroker reports |
| Now, if it takes 10 months for 2500 shares of | | | | to you that all 4500 shares of stock in |
| stock from Wal-Mart to become available, then | | | | Southwestern Bell are available; however, the |
| there is a high chance that the price of each | | | | price per stock has increased 34%. Because you |
| stock has increased. However, because you | | | | did not cancel this all-or-none order, you are now |
| placed an AON order 10 months ago, your broker | | | | forced to purchase all 4500 shares of |
| is currently executing the order, and the total | | | | Southwestern Bell stock. The other disadvantage |
| number of stocks are presently available, so you | | | | is that you may not receive the all-or-none |
| are required to purchase all 2500 of them no | | | | ordered stocks. Let's say that you wanted to |
| matter what the price per stock may be. | | | | purchase 6000 shares of stock from Friedman's, |
| Obviously the advantage to the all-or-none order | | | | a jewelry store, however, not all the stock is |
| is that the price of any given company's stock | | | | currently available. So, you place an all-or-none |
| could either stay the same or even decrease in | | | | order. Three months later, your stockbroker goes |
| price. For example, you would like to obtain 3000 | | | | to complete the order; however, there are still |
| shares of stock in Applebee's, a restaurant chain; | | | | not a total of 6000 stocks available from |
| however, because Applebee's stocks are in high | | | | Friedman's. Because your stockbroker attempted |
| demand, there are only 1000 stocks available for | | | | to fill the order, you have lost all of the stocks |
| purchase. You really love this restaurant chain and | | | | that you wanted to purchase. |
| you had your heart set on 3000 shares of | | | | Because this type of order is highly stressful, it is |
| Applebee's, so you decided to place an all-or-none | | | | imperative that you hire a broker in which you |
| order on the purchase of these stocks. Currently | | | | can thoroughly trust due to the fact that one |
| the each share of stock is priced at $200 each, | | | | wrong move will make you lose everything! |