OCO Spread Betting Orders
In spread betting, you need to be able to react to market movements as quickly as possible when the state of play changes. And one thing is for sure: even with the benefit of in-depth market analysis, no trader is able to react faster than an OCO (one-cancels-the-other) order.
Here, spread betting provider City Index shows how to use OCO orders to your advantage.
OCO Spread Betting Orders: Take Two Views
As the name suggests, a one-cancels-the-other order allows you to take two views on the same market by placing two simultaneous opening orders. When a price movement triggers one of your chosen price points, that order will be executed while the remaining order is automatically cancelled.
OCO Spread Betting Orders Example
Imagine non-farms payroll numbers are due for release at 1:30pm and you want to trade the direction resulting from the announcement. The market is currently at 5,500, so you might place one OCO order to buy at 5,550 and another to sell at 5,450.
Therefore, whichever order was hit first would execute and the other order would be cancelled. This way you are in position to trade whichever direction the price moves in.
You can also use OCO orders on stop losses and limit orders. For example, if you believed the FTSE was set to rally, you could buy the FTSE at £2 per point on 5,500 and place an OCO order to close your trade at 5,450 or 5,600, whichever was reached first.
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OCO Spread Betting Orders - edited by MJ, 12 December 2011.
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