OCO order (one-cancels-the-other)
Also called: OCO · one cancels the other
Definition
An OCO (one-cancels-the-other) order pairs two orders, typically a take-profit and a stop-loss, so that when one of them executes, the other is automatically cancelled.
How OCO order works
OCO solves a simple problem. If you place a take-profit limit and a separate stop-loss on the same coins, and one fills, the other might later fill too and open an unwanted position, or the exchange might reject it for lack of balance. With OCO, the exchange links them and cancels the leftover one for you.
A typical spot OCO for a long position is a sell limit above the price as the take-profit and a sell stop-limit or stop-market below as the stop-loss. On futures, the same idea is often built into the take-profit and stop-loss fields attached to a position.
OCO is useful when you cannot watch the market, because both exits are planned in advance. Check how your exchange implements it: some reserve the full balance for both legs, and the stop leg may be a stop-limit that can fail to fill in a sharp move.
Example
Suppose you hold 0.5 BTC bought at 60,000 USDT. You place an OCO sell for 0.5 BTC with a limit at 66,000 and a stop at 57,000. If BTC rises to 66,000, the limit fills for a gain of 3,000 USDT and the stop is cancelled. If BTC falls to 57,000 first, the stop triggers for a loss of about 1,500 USDT and the take-profit is cancelled. Your reward-to-risk on the trade is 2 to 1.
Common mistakes
- Placing two separate exit orders instead of an OCO, then accidentally leaving one open after the other fills.
- Not knowing whether the stop leg is a stop-limit, which can fail to fill in a crash.
- Setting the take-profit and stop so close together that normal volatility hits one at random.
Learn and practise
FAQ
What does OCO mean in crypto?
OCO stands for one-cancels-the-other, two linked orders where filling one cancels the other.
Can I use OCO for buying?
Yes. A buy OCO can combine a buy limit below the price with a buy stop above it, so you enter on either a dip or a breakout.
Do all exchanges support OCO orders?
Many major exchanges do on spot, but naming and options vary, and some only offer linked take-profit and stop-loss on futures positions.