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OCO (one-cancels-other)

Two linked orders where filling one automatically cancels the other.

OCO pairs are most often a stop-loss and a take-profit on the same position. Whichever triggers first closes the trade and the other is removed, so you are not left with an unintended order that could open a new position.

They can also be used for entries: a buy stop above a range and a sell stop below it, so you trade the breakout in whichever direction it comes.

Example: long 100 shares at $50 with OCO stop at $48 and limit sell at $55. Price hits $55, the limit fills, and the $48 stop cancels itself.

Related: bracket-order, stop-loss, take-profit, range

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

A range beside a trendOne chart swinging between a flat floor and ceiling, another stepping upwards inside a pair of sloping lines.Range-boundresistancesupportprice bounces between two levelsTrendingthe trend channelhigher highs and higher lowsA range has two flat edges; a trend has two sloping ones.
Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.

Educational only, not advice. Spotted an error? Post in Site Feedback.