A One Cancels Other (OCO) order is a type of conditional order used in trading crypto, options, or futures contracts.
An OCO order consists of two orders: a primary order and a secondary order. The primary order is the main order that is executed if certain conditions are met, such as a specific price being reached. The secondary order is an offsetting order that is placed simultaneously with the primary order. The secondary order is typically a stop-loss order or a limit order.
The purpose of an OCO order is to provide traders with a way to limit their risk exposure while still maintaining flexibility in their trading strategy. If the primary order is executed, the secondary order is automatically cancelled. Conversely, if the secondary order is executed, the primary order is cancelled.
For example, a trader may place an OCO order to buy a crypto if it reaches a certain price, and to sell the crypto if it falls to a certain price. If the crypto price rises to the buy price, the buy order is executed and the sell order is automatically cancelled. If the crypto price falls to the sell price, the sell order is executed and the buy order is cancelled.
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