An Exit OCO order combines the power of OSO and OCO to create a fully automated trade plan from entry to exit. The moment your entry order is executed, two exit orders, a profit target and a stop loss, are immediately placed. Once either exit order is filled, the other is automatically cancelled. In short, it allows you to enter with a complete exit strategy, without needing to manually manage the position.
How it works
An Exit OCO follows a structured sequence:
- Entry order (OSO component): You place your buy order, either a limit or stop limit order. Once filled, it automatically sends your exit orders.
- Dual exit orders (OCO component): A take profit and stop loss order are activated simultaneously.
Example: Setting an Exit OCO
You are monitoring a stock trading just below a key resistance level and want to participate only if a breakout confirms upward momentum. Rather than managing the trade manually, you choose an Exit OCO to structure your entire strategy from entry to exit.
- Entry order: You place a buy stop limit with a stop price at ₱63.00 and a limit price at ₱63.20.
- Dual exit orders: Once your buy order is filled, two sell orders are automatically deployed. To lock in gains, you set a sell limit at ₱70.00. To protect your capital, you place a sell stop limit with a stop price at ₱58.00 and a limit price at ₱57.90
If the breakout occurs, your position is opened and your entire exit strategy is instantly deployed. If the stock rallies to ₱70.00, profits are secured and the stop is cancelled.
If the stock weakens and hits ₱58.00, your risk is contained and the profit order disappears.