Orders & ExecutionOne-Cancels-the-OtherBracket Order
OCO Order (One-Cancels-the-Other)
A linked pair of orders in which the execution of one automatically cancels the other.
What OCO Order (One-Cancels-the-Other) means
An OCO order joins two pending orders so that only one of them can ever be filled. The moment either side triggers, the broker's order server cancels its partner. Two common shapes exist. The first is a straddle entry, with a buy stop above the market and a sell stop below it, used when a trader expects a decisive move from a range but has no view on direction. The second is an exit bracket on an existing position, pairing a stop loss with a take profit.
The bracket form is what most retail platforms mean when they attach both a stop loss and a take profit to a trade: those two orders are implicitly an OCO pair, since closing the position on one necessarily removes the need for the other. Some platforms extend this to a one-triggers-a-one-cancels-the-other structure, where an entry order, once filled, automatically places the linked stop and target. That automation removes the window in which a filled position sits unprotected.
The main caveat is that cancellation is not instantaneous in every implementation, and in a violently two-sided market it is theoretically possible for both legs of a straddle to fill before the cancel message lands, leaving the trader flat and paying two spreads. Traders should also check whether the broker keeps the OCO link alive across a rollover or a platform restart, since some systems drop the association.
Worked example
Ahead of a central bank decision with EUR/USD at 1.0850, a trader sets an OCO with a buy stop at 1.0900 and a sell stop at 1.0800; if the buy stop fills on an upside break, the sell stop is cancelled automatically.
Related terms
- Stop LossA resting order that closes an open position once price reaches a set level, capping the loss on that trade.
- Take ProfitA resting limit order that closes an open position once price reaches a chosen profit level.
- Pending OrderAn instruction to open a position at a future price level, held by the broker until triggered or cancelled.
- Stop OrderAn order that converts into a market order once price trades through a specified trigger level.
- News TradingTrading around scheduled releases or unexpected headlines, seeking to profit from the repricing that surprises produce.
Frequently asked questions
What does OCO Order (One-Cancels-the-Other) mean in forex trading?
A linked pair of orders in which the execution of one automatically cancels the other.
How does OCO Order (One-Cancels-the-Other) work in practice?
The bracket form is what most retail platforms mean when they attach both a stop loss and a take profit to a trade: those two orders are implicitly an OCO pair, since closing the position on one necessarily removes the need for the other. Some platforms extend this to a one-triggers-a-one-cancels-the-other structure, where an entry order, once filled, automatically places the linked stop and target. That automation removes the window in which a filled position sits unprotected.
What is an example of OCO Order (One-Cancels-the-Other)?
Ahead of a central bank decision with EUR/USD at 1.0850, a trader sets an OCO with a buy stop at 1.0900 and a sell stop at 1.0800; if the buy stop fills on an upside break, the sell stop is cancelled automatically.
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