OCO — A pair of linked orders where the execution of one automatically cancels the other.
How OCO works in prop trading
An OCO pairs two orders so only one can execute. The standard use is a take-profit limit above and a protective stop below an open long: whichever is hit first cancels the other, so a filled target cannot leave an orphaned stop that later opens a new position in the wrong direction.
On a prop account the value is that the position is protected without you watching it. That matters directly for the rules — an orphaned order that fills unattended can breach a contract cap or leave a position open through a flatten deadline. Confirm the link is handled server-side by the platform or broker rather than by your desktop application, which stops working the moment your connection does.
Key points
- Two linked orders; filling one cancels the other automatically.
- Prevents an orphaned stop or target from opening an unintended position.
- Server-side OCO survives a disconnect; platform-side does not.
- The building block of a bracket order.
Also known as
- one cancels other
- one cancels the other
- OCO order
Frequently asked questions
What does OCO mean in trading?
One Cancels the Other. Two orders are linked so that the execution of one cancels the other, most commonly a take-profit and a stop-loss around an open position.
Is OCO handled by the platform or the broker?
It depends on the platform. Server-side OCO is managed by the broker or exchange gateway and survives a disconnect; platform-side OCO relies on your application running. On a prop account with a hard flatten deadline, server-side is materially safer.
OCO is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.