one cancels other
One Cancels Other (OCO) is a pair of stock orders where if one executes, the other is automatically cancelled, so you never end up holding both.
In plain English
Remember queuing at the bus stop where two danfos pull up at once, one going your usual route and one going a slightly faster route through a road you have never tried, and you shout for a seat in whichever one moves first, then wave off the other the moment your bus starts rolling. That is the whole spirit of a One Cancels Other order.
On the Nigerian Exchange or on a trading app, you sometimes want to place two orders at the same time because you are not sure which direction the price will go. Say you hold shares in a bank stock and it is sitting at ₦32. You want to sell if it climbs to ₦36 to lock in profit, but you also want to sell if it drops to ₦28 to protect yourself from further loss. Instead of watching the screen all day, you set both orders together as one cancels other. The moment either price is hit and the trade fires, the platform automatically pulls down the second order so you are not left with a strange, unwanted double sale.
A trader in London using a contract for difference platform on Lagos listed ADRs might use the same trick, setting a take profit and a stop loss together, so one instruction retires the other the instant it is no longer needed.
Someone in Toronto managing a small portfolio for family back in Enugu could set this on a dollar stock before travelling, so that whichever target price is reached first, the trade happens cleanly without them needing to be awake at the right time zone.
The comfort in this order type is that it removes the anxiety of choosing one direction and being wrong. You are covered both ways, and the system tidies up after itself.
You own shares bought at ₦30. You set a sell order at ₦35 for profit and another at ₦27 as a stop loss, linked as one cancels other. The stock rises to ₦35, that order executes, and the ₦27 order disappears on its own.
Questions people ask
Can I use One Cancels Other on any Nigerian trading app?
It depends on the broker. Some Nigerian stockbroking apps and CFD platforms support it directly, others only offer simple stop loss orders, so check your platform's order settings or ask your broker before assuming it is available.
What happens if both prices are hit at almost the same moment?
The system executes whichever order reaches its trigger price first, even if it is by a second, and immediately cancels the other, so there is no risk of both trades going through.
Is this the same as a stop loss order?
Not quite. A stop loss is one order on its own. One cancels other pairs a stop loss with a second order, often a take profit, so both possibilities are covered at once and whichever happens first tidies up the rest.
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