OCO Order

OCO stands for one-cancels-the-other: a pair of orders submitted together, where the execution of one automatically cancels the other. The usual arrangement pairs a target on one side of the current price with a protective order on the opposite side, so that whichever condition is reached first ends the position and the remaining instruction is withdrawn. Its purpose is arithmetical rather than predictive: it prevents both orders from filling, which without the linkage could leave a position open in the opposite direction to the one intended. What it does not do is guarantee a price. The protective side is generally a stop that becomes a market or limit order when triggered, so it inherits the behaviour of that type — a market conversion can execute away from the trigger in a fast move, and a limit conversion may not execute at all. Availability, the order types each side may use, and whether both parts are held against a balance vary by venue.