Orders & execution
What is a One-Cancels-the-Other (OCO) order pair and how does it manage breakout trades?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
A One-Cancels-the-Other (OCO) order pairs two orders, typically a profit target and a stop-loss, so that execution of either one automatically cancels the remaining order.
How it works
OCO orders are popular for managing breakout trades where a trader sets exits above and below the current price, letting whichever level is hit first close the position automatically.
An example
A trader sets an OCO with a sell limit at $55 and a stop-loss at $45; if price hits $55 first, the $45 stop order is automatically canceled.
Risk & limitations
Rapid price swings can occasionally trigger both legs nearly simultaneously in volatile markets, so execution isn't always as clean as the logic implies.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.