A one-cancels-the-other order, or OCO, links two trade orders for the same asset. When one order is filled, the other is automatically canceled. Traders use OCO to try for two possible outcomes at once, without needing to monitor the market constantly.
An OCO links two conditional orders so that only one can be completed. Usually, one order is set to take profit at a target price, and the other is meant to limit losses if the market moves against you. This setup lets traders set clear exit prices and avoids having to cancel orders by hand.
When you use an OCO, your trading platform keeps both orders active at once. If the market reaches the price of one order, it is filled and the other is canceled right away. If you cancel one order yourself, the other is also canceled. This automatic link is what makes OCO different from placing two separate orders.
Most OCO setups use a limit order and or a stop-loss order. The limit order aims to close at your chosen profit level. The stop order activates if the price goes past a set point, helping to limit losses or open a position if you expect momentum. Some exchanges let you choose between a market order or a stop-limit order for the stop, which affects how the order is filled after the stop price is reached.
Traders use OCO orders for a few clear reasons. They automate both profit-taking and loss-cutting at once. OCO orders are useful if you leave trades overnight or watch several markets. They also help avoid the mistake of having two conflicting orders active at the same time.
OCO orders cut down on manual work because the platform cancels the paired order automatically when one is filled. This reduces the risk of mistakes, such as forgetting to cancel an order if the market changes. OCO also helps with risk management by letting traders set exit points ahead of time.
OCO orders rely on your exchange or broker. Not all platforms offer OCO, and those that do might handle them differently. In fast markets or with low liquidity, a stop order might fill at a worse price than you expect, and limit orders might not fill at all. Linked orders can also give a false sense of complete protection if you do not check how your exchange handles orders after a stop is triggered.
Each trading platform has its own steps, but the process is similar. Pick your asset, choose the OCO option if it is available, and enter two prices: one for taking profit and one for stopping losses. Check if the stop will use a market order or a stop-limit order when triggered. It is a good idea to read the platform’s help pages to understand how it handles partial fills and order cancellations.
Other orders often mentioned with OCO are simple limit orders, stop-loss orders, stop-limit orders, and bracket orders. Bracket orders set both a profit target and a stop, like OCO, but the details can vary by platform. Check your platform’s documentation to see the exact differences.
Suppose you buy a coin at 84,000. You can set an OCO to sell at 86,000 to secure profits and place a stop order at 83,500 to limit losses. If the price rises to 86,000, your sell order fills, and the stop order is canceled. If the price drops to 83,500 first, the stop order fills, and the sell order is removed. This way, you are covered in both directions without both trades being filled.
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