OCO One Cancels The Other
One Cancels the Other (OCO) orders are the norm with stop-losses and limits. With an open position, a trader may have attached a limit as well as a stop and trailing stop. After a position is closed by a limit, what is there to prevent the leftover stop from remaining, waiting to be executed? If they are OCOs, then when the limit is executed the stop will be canceled if the stop is executed the limit will be canceled. This ensures there will be no˜leftover orders after a position is closed.
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