One-Cancels-the-Other (OCO)

One-Cancels-the-Other (OCO) is a type of order that combines two orders: one is a limit order, and the other is a stop order. If one of the orders is executed, the other order is automatically canceled. OCO orders are commonly used by traders to manage risk and lock in profits. By placing two orders simultaneously, a trader ensures that if one order is executed, the other will be canceled, preventing them from holding an unintended position. Example: A trader might set an OCO order with a stop-loss order at $50 and a limit sell order at $60. If the price hits $50, the stop order triggers and the limit order is canceled.