One-Cancels-All Orders (OCA)

Definition

The term One-Cancels-All refers to instructions sent to a broker that consist of several active limit orders; in the event one is filled, the remaining orders are automatically inactivated.  One-Cancels-All provides traders with the ability to select from one of several stocks at their desired strike price.

Explanation

One-Cancels-All (OCA) orders are one of several types of contingent orders, which consist of two or more sets of instructions.  When an OCA order is place, all orders are active.  If one of the orders executes, then the remaining orders are automatically canceled, or inactivated.

Typically, investors will use OCA orders when they have the funds to purchase one stock but are willing to choose from several securities.  For example, a One-Cancels-All order may consist of several limit orders, which are used to buy or sell a stock at a specific price (or better).  A buy limit order will only execute at the limit price or lower, while a sell limit order will only execute a the limit price or higher.

By placing several buy limit orders as part of an OCA, the trader has the ability to select from one of several stocks if any one of those securities reaches the strike price.  If that happens, the remaining buy limit orders will automatically be canceled.  As is the case with other types of broker instructions, the OCA can also be combined with a Time-in-Force instruction such as Good-Til-Canceled.

Example

A trader has $10,000 they would like to invest in the stock market.  They are willing to purchase any one of three stocks, but not all three securities. The investor places a One-Cancels-All order for 1,000 shares of Company XYZ at $10.00, 500 shares of Company ABC at $20.00, and 100 shares of Company 123 at $100.00.   If any one of these stocks reaches the strike price set by the trader, the order will automatically execute, and the remaining orders will be canceled.

Related Terms

All-or-NoneFill-or-Kill, Good-Til-Canceled, Immediate-or-CancelNational Best Offer, National Best Bid, market order, limit order, day order, One-Triggers-the-Other, One-Cancels-the-Other, Good-Til-Date, At-the-Opening