OCO(Choose one) Order Learning Guide
OCO Link a take-profit limit order with a stop-loss limit order, suitable for presetting two mutually exclusive exit conditions for an existing position. The key points are understanding the automatic cancellation mechanism and the difference between the stop-loss side's stop price and limit price.
Core Mechanism
OCO The order retains two linked orders simultaneously: one for taking profit at the target price, and the other for controlling losses when the price falls. After either order is fully or partially filled, the system automatically cancels the other; manually canceling either order also cancels the other simultaneously.
How the Stop-Loss Side Executes
A limit take-profit and stop-loss order contains a stop price and a limit price. Only after the market reaches the stop price will the system submit a sell order at the preset limit price. Triggering does not guarantee execution; if the market quickly falls below the limit price and there are no matching buyers, the order may remain on the order book.
Use Cases and Limitations
OCO Suitable for setting both a profit target and a loss boundary for an existing position, and can also be used to protect unrealized profits and reduce the need for continuous monitoring. However, it cannot eliminate the risks of price gaps, insufficient liquidity, or a limit order failing to execute. Before using it, first understand the execution rules of the two component orders.
OCO Compared with OTOCO
OCO Manages only two mutually exclusive exit orders for an existing position.OTOCO whereas an OTOCO consists of three linked orders: the primary entry order is executed first, and after it is filled, a set containing a take-profit and stop-loss OCO exit order is activated, allowing the entry and subsequent exit conditions to be set at once.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/oco-order
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