Pradžia
Straipsniai
What Is an OCO Order?

What Is an OCO Order?

Beginner
Paskelbta Aug 22, 2019Naujinta Apr 13, 2023
7m

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks. Products mentioned in this article may not be available in your region.

Key Takeaways

  • A “One Cancels the Other" (OCO) order allows you to place two orders simultaneously. If one is fulfilled, the other is automatically canceled. 

  • Understanding limit orders, stop-limit orders, and general order-setting conditions is essential for effectively using OCO orders. 

  • OCO orders can make trading more versatile and secure by locking profits, limiting risks, and automating position entry and exit. 

oco cta banner

Note: We highly recommend reading our guides on limit and stop-limit orders prior to continuing.

What Is an OCO Order?

An OCO, or “One Cancels the Other” order, allows you to place two orders simultaneously. It combines a limit order with a stop-limit order, but only one of the two can be executed.

In other words, once one of the orders gets partially or fully fulfilled, the remaining one will be canceled automatically. Note that manually canceling one of the orders will also cancel the other.

When trading on Binance, you can use OCO orders as a basic form of trade automation. This feature gives you the option of placing two limit orders simultaneously, which may come in handy for taking profit and minimizing potential losses.

How to Use OCO Orders?

After logging in to your Binance account, enter the trading area as shown below. Click “Stop Limit” to open a dropdown menu and select “OCO”.

OCO order

On Binance, OCO orders can be placed as a pair of buying or selling orders. You can find more information about OCO orders by clicking on the “i” symbol.

Binance OCO order

After selecting the OCO option, a new trading interface will be loaded. This interface allows you to set a limit and a stop-limit order simultaneously.

After placing your OCO order, you can scroll down to visualize the details of both orders in the Open Orders section.

Limit order

A limit order allows you to buy or sell an asset at a specific price. It is visible in the order book and will only be executed at the price you set or a more favorable one.

Stop-limit order

This is a two-step process that involves:

  • Stop: The price at which your stop-limit order will be triggered (e.g., 553.34 USDT). Note that this is labeled Stop Loss (or SL Trigger) on the OCO order interface on Binance. 

  • Limit: The actual price of your limit order after the stop is triggered (e.g., 553.24). Note that this is labeled SL Limit on the OCO order interface on Binance. 

Amount: The size of your order (e.g., 5 BNB).

Total: The total value of your order.

binance OCO order interface

OCO Order Setting Conditions

For sell orders:

When you have a long position, you may set the Stop Price slightly below a key support level to minimize potential losses. If the price drops, this will trigger the stop-loss order. Support levels can act like safety nets and are identified based on past behavior, where assets tend to find buying interest. 

support levels

To increase execution chances, you may set the Limit Price (SL Limit) slightly below the Stop Price, as we have done in the example below (SL Trigger at 553.34  and SL Limit at 553.24). If the SL Limit is set above or equal to the SL trigger, there is a higher chance of the order being left unfilled, especially if the price drops too fast.

binance OCO sell

For buy orders:

When you have a short position and want to use a buy order as a stop loss, you may set the Stop price slightly above a key resistance level to minimize potential losses. If the price rises above the resistance level, your stop-loss will trigger the buy order. 

In contrast with support levels, resistance levels are areas where an asset price tends to find selling pressure. For short positions, these levels can act like safety nets and are also identified based on previous price action.

resistance levels

To increase execution chances, you may set the Limit Price (SL Limit) slightly above the Stop Price. If the SL Limit is set below or equal to the SL trigger, there is a higher chance of the order being left unfilled, especially if the price rises too fast.

OCO order in practice

Consider the price range below of the BNB/USDT trading pair. The white line at the top is a resistance level around $590, and the white line below is a support level around $560.

OCO example

Now imagine that you want to open a long in this price range. The current price is $577.46, but you want to wait for a better entry closer to the support level (white line at the bottom). Let’s suppose that your desired entry price is $562.91. 

If the price doesn’t drop to your desired entry point, you won’t take the trade. But if it drops to your entry, you will open the trade with your target at $589.52 and your stop-loss at $553.34.

OCO trade example

If the price follows the blue path, your trade would result in a loss since your stop-loss would be triggered ($553.34). For your trade to be profitable, you want the price to follow the yellow arrow path (entry at $562.91, and take-profit at $589.52).

In this scenario, an OCO order could cover all potential outcomes, ensuring you take profits if the price moves as you expect, and limiting losses in case the trade goes wrong.

OCO buy

In our example, the Stop Price is 553.34 USDT (the trigger price), and the SL Limit is 553.24 USDT (the price at which the order will be placed). This means your stop-limit order will activate when the price reaches or falls below 553.34, and a limit sell order will be placed at 553.24 USDT. However, keep in mind that if the price falls too quickly beyond 553.24, there’s a risk that the limit order may not be filled.

In simpler terms, if BNB/USDT drops to or below 553.34, a limit sell order at 553.24 will be placed.

Closing Thoughts

The OCO feature is a simple but powerful tool that allows you and other Binance users to trade in a more secure and versatile way. This specific type of order can be useful for locking profits, limiting risks, and even for entering and exiting positions. However, it’s crucial to have an in-depth understanding of limit and stop-limit orders before using OCO orders. This knowledge will make you feel more informed and prepared for your trades.

Further Reading

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Binance Sensei
I am powered by ChatGPT and trained with 1,000+ articles and glossary entries from Binance Academy. My responses are provided on an “as is” basis for general information only, without any representation, warranty or guarantee of completeness or accuracy. See full terms and conditions here
1