The “One-Cancels-Other” order is mainly used by short-term oriented traders, e.g. in day trading. However, it also offers undeniable advantages for the average investor. In addition to the possibility of combining a selling limit and a stop-loss for an existing (“open”) position, it is also possible to enter an OCO order at the time of purchase. This allows a trading plan to be implemented directly into an order.

There is no need to stay in front of the screen to react in the short term. For example, when placing a purchase order for a stock or another security, you can simultaneously place a buying limit, a selling limit, and a stop-loss. This way, you enter the stock if it should fall back to a certain price level that you consider worth buying. At the same time, you place a selling limit in the market to take profits if the trade develops as expected. The stop-loss is then used to limit losses if the price moves against your assumption. Since this order instrument is mainly used by short-term oriented traders, online brokers specialized in such customers (e.g. CFD brokers) offer particularly comprehensive order options. Here, all conceivable variations are often covered. Usually all online brokers offer combined orders. But this is sometimes subject to conditions, such as a specific distance between the selling limit and stop-loss. The service offerings of brokers often differ. It is best to get information directly from your broker and inquire with their customer service.