An OCO order (One Cancels the Other) links two orders, typically two limit orders, so that the execution of one automatically cancels the other, according to the definition given by the CFTC, the US derivatives markets regulator, in its official glossary consulted on October 6, 2026 (CFTC Glossary). What this same documentation, along with that of several brokers, also clarifies: the cancellation does not always happen in time, and the two orders can in some cases both be executed.
What the baseline definition says
The CFTC defines the OCO order as a pair of orders, generally limit orders, where the filling of one automatically triggers the cancellation of the other (CFTC Glossary). On the European side, the FCA, the UK financial markets regulator, uses an equivalent definition in its technical handbook: two orders are linked such that if one of the two is executed, the other is withdrawn through market operations (FCA Handbook). Both texts describe the same principle: a linking mechanism between two orders, designed so that only one of the two remains active at a time.
What brokers document further: cancellation is not guaranteed
The broker Fidelity states in its online glossary that the cancellation of the linked order happens on a best-efforts basis, not a guaranteed one: both orders may be simultaneously active in the market, and the execution of one, even partial, only triggers an attempt to cancel the other (Fidelity Glossary). Interactive Brokers describes the same mechanism for its OCA (One Cancels All) orders: because the cancellation procedure is automated, there is no guarantee that the cancellation request reaches the exchange before an order has already been executed (Interactive Brokers). These two sources therefore document a technical delay between the execution of one order and the effective cancellation of the other, a delay that is never zero.
The case where both orders are actually executed
The MultiCharts platform goes further in its trading risks documentation: in cases of high volatility, there may not be enough time to cancel the remaining order, and both orders can then be executed. The same document adds that both orders can also be filled in the case, described as unlikely, of a market crash or a loss of connection (MultiCharts, Trading Risks). This passage does not describe a software anomaly but a consequence consistent with the mechanism described by Fidelity and Interactive Brokers: if cancellation is an attempt rather than a guarantee, it becomes plausible that this attempt fails under certain market conditions.
What these texts do not specify
None of the sources consulted give a numeric frequency for this double fill, nor a volatility threshold beyond which the risk becomes significant. The wording used, best efforts at Fidelity, no guarantee at Interactive Brokers, unlikely at MultiCharts, points to a rare but non-zero event, without any associated public quantification. A trader therefore cannot rely on a percentage to assess this risk, only on the nature of the mechanism itself.
This double-execution risk joins other already documented limits of automated orders, such as those of the stop-loss trigger order, which becomes a simple market order once triggered, or the trailing stop order, whose moving threshold never guarantees the execution price. In both cases, as with the OCO order, the logic of the order is clear on paper, but its execution depends on market speed and connection at the critical moment, a factor also documented for slippage on CFDs and Forex.
Frequently asked questions
Does an OCO order guarantee that only one of the two orders will be executed?
No. The CFTC and the FCA describe the principle of automatic cancellation, but Fidelity specifies that this cancellation happens on a best-efforts basis, not a guaranteed one. Both orders can remain active at the same time in the market during the short delay needed to process the cancellation.
Under what conditions can both orders of an OCO order execute together?
MultiCharts documents two cases: high volatility, where there may not be enough time to cancel the remaining order, and rarer events such as a market crash or a loss of connection between the platform and the execution venue.
Why can the automatic cancellation fail?
Interactive Brokers explains that the cancellation procedure for linked orders is an automated process, with no guarantee that the cancellation request reaches the execution venue before the other order has already been filled, in whole or in part.
What happens if one of the two orders is only partially executed?
Fidelity specifies that partial executions also trigger an attempt to cancel the other order in the pair, not a certain automatic cancellation. The same best-efforts principle applies, whether the execution is total or partial.