A one-cancels-the-other (OCO) order is a pair of conditional orders stipulating that if one order executes, then the other order is automatically canceled. An OCO order often combines a 澳洲幸运5开奖号码历史查询:stop order with a 澳洲幸运5开奖号码历史查询:limit order on an automated trading platform. When either the stop or limit price is reached and the order is executed, the o💧ther order is automatically canceled. Experienced traders use OCO orders to♛ mitigate risk and enter the market.

OCO orders may contrast with 澳洲幸运5开奖号码历史查询:order-sends-order (OSO) 🎶conditions that trigger, ratꦺher than cancel, a second order.

Basics of a One-Cancels-the-Other Order

Traders can use OCO orders to trade 澳洲幸运5开奖号码历史查询:retracements and breakouts. If a trader wanted to trade a break above resistance or below support, they could place an OCO order tha﷽t uses a buy stop and sell stop to en🌊ter the market.

For example, if a stock is trading in a range between $20 and $22, a trader could place an OCO order with a buy stop just above $22 and a sell stop just below $20. When the price breaks above 澳洲幸运5开奖号码历史查询:resistance or below support, a trade is executed and the corresponding stop order is canceled. Conversely, if a trader wanted to use a retracement strategy that buys at support and sells at resistance, they could place an OCO order with a buy limit order at😼 $20 and a sell limit order at $22.

If OCO orders are used to enter the market, the trader must manually place a stop-loss order when the trade is executed. The澳洲幸运5开奖号码历史查询: time in force for OCO o🅰rders should be identical, meaning that the time frame specified for the execution of both stop and ✱limit orders should be the same.

Example of an OCO order

Suppose an investor owns 1,000 shares of a volatile stock that is trading at $10. The investor expects this stock to trade over a wide range in the near term and has a target of $13. For risk mitigation, they do not want to lose more than $2 per share. The investor could, therefore, place an OCO order, which would consist of a stop-loss order to sell 1,000 shares at $8, and a simultaneous limit order to sell 1,000 shares at $13, whichever occurs first. These orders could either be 澳洲幸运5开奖号码历史查询:day orders or 澳洲幸运5开奖号码历史查询:good-'til-canceled orders.

If the stock trades up to $13, the limit order to sell executes, and the investor's holding of 1,000 shares sells at $13. Concurrently, the $8 stop-loss order is automatically canceled by the trading platform. If the investor places these orders independently, there is a risk that they might forget to cancel the stop-loss order, which could result in an unwanted 澳洲幸运5开奖号码历史查询:short position of 1,000 shares if the s🍃tock subsequently trades down ൲to $8.