Trading · Orders and execution
Bracket, OCO and OTO orders: linking entries, targets and stops
How one-triggers-other, one-cancels-other and bracket orders link an entry to a profit target and a stop, worked numbers, and the broker-specific traps to check.
On this page
Most trades have three decisions: where to get in, where to take a profit and where to admit you were wrong. Conditional orders let you hand all three to your broker at once. A one-triggers-other (OTO) order sends a second order when the first one fills. A one-cancels-other (OCO) order pairs two orders so that when one fills the other is withdrawn. A bracket combines them: an entry that, once filled, sets up both a profit target and a stop, linked as OCO.
These are features of your broker's order system, not order types defined by an exchange or a regulator, so the names, defaults and failure modes differ from firm to firm. This page explains how each one works, walks through a bracket with numbers, and lists the broker-specific details worth checking before you rely on one. The examples are illustrative outlines, not recommended trades.
One-triggers-other (OTO)
An OTO links a primary order to a secondary order that is sent only when the primary fills. It's used to make sure the follow-up exists the moment you have a position.
OTO orders can also chain the other way: a take-profit limit as the secondary, or an exit that triggers a new entry in a different security. Brokers limit how many levels a chain can have.
One-cancels-other (OCO)
An OCO pairs two orders that are both live at the same time. When either one fills, the broker cancels the other. The classic use is an exit bracket around shares you already own: a sell limit above the market (to take a profit) and a sell stop below it (to cap a loss).
Without the link you'd have two sell orders for the same shares. If the limit filled and the stop stayed live, a later drop could trigger the stop and sell shares you no longer have, which in a margin account can open a short position. OCO prevents that, as long as the cancellation reaches the market in time.
Bracket orders
A bracket order is an OTO whose secondary is an OCO pair. In one ticket you specify:
- an entry (the parent), usually a limit order;
- a take-profit (a limit order on the other side);
- a stop-loss (a stop or stop-limit on the other side).
The two exits wait until the entry fills, then go live together, linked so that one filling cancels the other.
The third ending is the one people forget. A bracket automates the plan; it doesn't upgrade the stop into a guarantee. The reward-to-risk arithmetic is covered in Risk-reward ratio and R multiples: the math of a trade, and how to size the 100 shares from the $300 risk is in Position sizing: how many shares to buy for a set risk.
Broker-specific caveats to check
Because conditional orders are broker features, the details below vary. Read your broker's order-entry help pages or ask before relying on any of them.
Partial fills of the entry. If only 60 of 100 shares fill, some brokers size the exits to 60 shares and adjust them as more fills arrive. Others activate the exits only when the entry is complete, which can leave 60 shares unprotected.
Time in force of the children. The take-profit and stop are often GTC even when the entry is a day order. Some brokers let you choose; some don't. An exit bracket you forgot about may still be live weeks later.
Extended hours. Many brokers trigger stops only during the regular session, and may not let the limit leg trade after hours either. A bracket doesn't protect you from an after-hours move until the next open.
Stop or stop-limit for the loss leg. Some platforms let the loss leg be a stop-limit. That limits how low it can sell, and adds the risk that it doesn't sell at all.
Selling the shares some other way. If you sell the position manually while the bracket's exits are live, the remaining orders may be rejected for lack of shares, or, in a margin account at some brokers, could execute as a short sale. Cancel the bracket first.
Modifying a leg. Changing the stop or target usually means canceling and replacing that leg. During the swap there may be a moment with only one leg live.
Order caps and products. Brokers limit how many conditional orders an account can hold, and may not offer brackets for options, fractional shares or certain securities.
Comparing the three
| Feature | OTO | OCO | Bracket |
|---|---|---|---|
| Orders involved | Primary + secondary | Two orders, both live | Entry + two exits |
| What links them | Fill triggers the next order | Fill of one cancels the other | Entry fill activates an OCO pair |
| Typical use | Enter, then place a stop | Target + stop on an existing holding | Full plan in one ticket |
| Risk the link removes | A stop for shares not yet owned | Two exits both selling the same shares | Both of those |
| Risk the link does not remove | Gaps and missed fills on each leg | Gaps; rare double fills | Gaps; partial-fill handling |
When conditional orders help, and when they don't
They help when you can't watch the market, when you want the discipline of deciding the exits before the entry, and when you'd otherwise risk duplicate sell orders. They're a mechanical way of following the plan you wrote down before the trade; see Trading plan and trading journal: what to write down.
They don't help with risks that sit outside the order system: overnight gaps, trading halts, earnings surprises and thin markets. They also can't adapt. If news changes the picture, a bracket will keep executing the old plan until you change it.
How Finabase helps
Finabase is a research app and doesn't place conditional orders. It can help you set the levels a bracket uses and see the risks around them: price alerts can sit at the same target and stop prices so you're notified when either is reached, and the earnings calendar shows when a scheduled report could gap the stock through your stop.
Frequently asked questions
What is a bracket order?
It's an entry order linked to two exit orders: a take-profit limit and a stop. The exits go live only when the entry fills, and they're linked so that when one fills the broker cancels the other.
What is the difference between OCO and OTO?
OTO is sequential: the second order is sent only after the first fills. OCO is simultaneous: both orders are live, and a fill on one cancels the other.
Can both sides of an OCO order fill?
It's possible but rare. The cancel for the second leg is sent after the first fills, and in an extremely fast market the second leg can execute before the cancel arrives. Brokers' disclosures generally make the customer responsible for any resulting position.
Do bracket orders work after hours?
It depends on the broker. Many trigger stop legs only during the regular session, so a move after the close is acted on at the next open. Check how your broker handles each leg in extended hours.
Summary
OTO orders sequence an entry and its follow-up; OCO orders keep two exits from both executing; bracket orders do both in one ticket. They make it easy to decide the entry, target and stop before the trade and to stick to them. They don't change how each order fills, so gaps can still push a stop far past its price, and broker rules on partial fills, time in force and extended hours decide how the link behaves in practice.