One Cancels the Other Order (OCO)

What Is One Cancels the Other Order (OCO)?

A One Cancels the Other Order (OCO) is an exchange order that involves canceling one order upon the execution of the other.

As the name suggests, it allows traders to establish two conditional orders where one fulfilled order automatically cancels the other.

A Guide to Conditional Trading Strategies

An OCO order is considered a conditional order, similar to limit and stop loss orders, where buy or sell actions are triggered based on specific price thresholds.

Typically, an OCO order consists of stop and limit orders. When one order is executed based on predetermined criteria, the other order becomes void.

Pro Trading Strategies

This trading tool is commonly used by professional traders to either capitalize on rising prices or limit losses during market downturns.

Limit orders are utilized to buy or sell assets when the market reaches a specified price range.

On the other hand, stop orders are employed in the opposite direction, enabling traders to sell an asset to prevent losses or buy an asset to profit from price increases.

It is important to note that executing OCO orders requires skillful decision-making and a comprehensive understanding of the market and trading strategies.