Narrator: Hello, traders. I'm Anthony Panzeca. And I'm going to show you how to create a one-cancels-other order, also known as an OCO, on the thinkorswim® platform. Let's just jump right into it.
Animation: The trading platform is set to the Trade screen. No stock is viewable.
Narrator: An OCO is a pair of orders that are linked, meaning if one order executes, then the other order is automatically canceled. Specifically, an OCO order combines a stop order with a limit order.
Traders can place these orders simultaneously to define a profit target, while simultaneously placing a stop loss to potentially limit losses.
So here's what you're going to do. You're going to go over to the Trade tab—make sure you're under All Products—type in your symbol. For today's example, we're going to use Apple.
You're going to go over to the price. When you hover over price, you're going to see that it says Symbol Menu. Simply left click, scroll down, hover over Buy custom, click on with OCO Bracket.
Something interesting happens in the bottom of the screen. The order ticket comes up to buy 100 Apple at a limit price. And then a limit price is also below that. That would be to take a profit. And then you're going to have a stop order below that to take a loss.
I recommend going through this order ticket left to right, top to bottom. So, we're going to walk through one.
Buy 100 Apple.
We can change this to MARKET if we want an execution right away.
And then we're going to go down to our second line.
Animation: The mouse is placed over the price cell text box for the target order. The mouse clicks on the plus and minus signs before 230.00 is entered into the price text box.
Narrator: The second line is the target. That's the price at which you'd want to take a profit. So we can set that to any price you want. Let's make it—you can use the up or down arrow to adjust the price, or you can manually click in the field and type in your price there. OK.
Then on the next thing, I recommend going to change these orders, these second two orders, to good till canceled. And then on your final bottom line, you're going to have sell 100 shares of Apple. It's going to say stop. And I would change that to good till canceled as well. Because remember, at the end of the day, if you have a day order in there, those orders will expire at the end of the day. So, if you don't get filled, those OCO orders will be gone.
So now we have a 225 stop. You can simply send that off to the exchange, and boom.
Bought 100 shares of Apple.
Now what you want to do is flip back to the Monitor tab. Remember, the Monitor tab is where we're going to go to monitor all of our positions and monitor all of our trades.
Animation: The mouse clicks on the Working Orders section revealing the stop and target orders. The mouse clicks on a order and list appears.
Narrator: Working Orders is the tab you'd want to click. And then you could see that we have the working OCO in there. You can right-click on either of those, and simply click on Cancel/replace order to change the price.
Animation: From the Charts tab, the mouse clicks on the Time frame setup list and then clicks on 1 D:1 M time frame.
Narrator: Another really cool feature about the platform is that you actually flip over to the chart and change your prices from there. So we're going to flip over to the chart, change our symbol to Apple, and we have to have it on a day chart in order for this to work. And you can see right there, you have your target limit on top and your stop order below. You can simply cancel/replace these by dragging and dropping them on the platform.
Animation: A bracket linking the two orders together appears on the right-hand side of the platform.
Narrator: You can take also the whole bracket by getting the little hand to appear. And if I want to, I can simply drag this up, if I wanted to raise both of my prices up. And an Order Confirmation Dialog comes up there with the corresponding prices. If you're not happy with those prices, simply click Edit. Go in there, and then you can manually adjust the prices.
Also, you can do these individually. So, if I wanted to adjust just the target on top, I can simply take that and drag it down. Order Confirmation Dialog comes up. You can simply hit Send if you're OK with the price in the box.
And that's how you create an OCO order on the thinkorswim platform.
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