One-cancels-the-other (OCO) is a combination of two orders: a stop order and a limit order. An OCO order stipulates that if one of the orders in the combination gets executed, the other in the pair automatically stands canceled.
The conditional OCO order is a great trading strategy in the crypto market, helping traders gain better oversight and control over volatile market conditions. It’s also incredibly beneficial when trading retracements and breakouts in the price action of a particular financial instrument.
An OCO order will have the same quantity and could be both buy and sell orders. However, one of the orders will be specified as a stop order, while the other will be a limit order.
Traders can place an OCO order by specifying the type of trade (buy or sell), price, stop order, limit order, and amount. When the asset’s price reaches either of the limits set in the stop or limit order, the trade is executed successfully, and the other order in the pair is canceled automatically.