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Advanced Orders

One Cancels Other

Commonly called a bracket order, a one-cancels-other (OCO) order allows for two orders to be placed simultaneously. If one order executes, the other order is automatically cancelled.

For example, if you place an order to buy one stock at a specific price and sell another one short at a different price, the one that's filled first cancels the other one. With a current position, you might also use an OCO order to either protect your profit with a limit order at a higher price or limit your losses with a stop-limit-on-quote order at a lower price. In this example, selling at one price voids the order to sell at the other.

Example

You currently own Company A at $45. You decide to enter an OCO order with an order above and below the current stock price.

You want to capture potential gains by selling your shares of Company A if the stock goes up to $50. You want to limit your potential losses by selling your shares of Company A if the stock price drops by more than $10.

To do this, you enter an OCO order including:

1. A sell limit order with a limit price of $50 and
2. A trailing stop-on-quote order with a trailing stop amount of $10.

Company A's price rises to $48. The trailing stop-on-quote amount follows the price of the stock, minimizing your potential losses. The stock then begins to fall and eventually reaches the trailing stop price of $38.

The trailing stop-on-quote order is triggered and the limit order is cancelled.

Advanced orders are only available for listed equities trading at $1.00 per share or higher, exchange-traded funds (ETFs), and options.

Investors should consider the investment objectives, risks, charges, and expenses of an Exchange Traded Fund (ETF) carefully before investing. A prospectus contains this and other information about the ETF and can be obtained from the issuer. The prospectus should be read carefully before investing.

Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in Scottrade's Options Application and Agreement, Brokerage Account Agreement, and Characteristics and Risks of Standardized Options (available at your local Scottrade branch office or from the Options Clearing Corporation at 1-888-OPTIONS or by visiting www.888options.com). All option accounts require prior approval by Scottrade. Market volatility, volume, and system availability may impact account access and trade execution. Supporting documentation for any claims will be supplied upon request.

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The information and content provided in the Scottrade® Knowledge Center is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.