What OCO and Bracket Orders Mean
OCO means one-cancels-the-other. You place a take-profit and a stop-loss against the same position. When one fills, the sibling cancels so you never get double-filled into a reverse position. A bracket is the full package: entry plus those two protective legs. On perpetual DEXs, brackets are how discretionary traders stop babysitting charts after the thesis is set.
Hyperliquid gives you the building blocks — limits, stops, reduce-only, and fast cancels — to run bracket logic even when the UI does not label a single “OCO” button the way some CEXs do. The skill is wiring the legs correctly and cleaning up after partial fills.
Why Brackets Matter on a Fast DEX
Hyperliquid’s order book moves quickly. Without a pre-committed exit plan, traders either cut winners too early or freeze when price spikes against them. Brackets fix both problems: the stop defines max loss in dollars, the target defines planned reward, and reduce-only keeps closes from flipping you the wrong way. Pair this with our reduce-only orders guide and stop-loss strategies.
- Risk known before entry — you size from stop distance, not hope.
- Emotion removed after entry — the plan is already on the book.
- Bot-friendly — API traders can replicate OCO with cancel-on-fill logic.
- Fee-aware — limit TPs can earn maker treatment when the book allows.
Practical Bracket Workflow on Hyperliquid
1. Define invalidation and target first
Before clicking buy or sell, write the invalidation level (where the thesis is wrong) and at least one profit level. Convert stop distance into position size so a full stop is a fixed percent of equity — for example 0.5%–1% account risk per trade. See position sizing for formulas.
2. Enter with a clear size
Market or limit entry is fine. Avoid resizing after fill unless you also rewrite both exit legs. Subaccounts help if you run multiple uncorrelated brackets — see subaccounts explained.
3. Place reduce-only take-profit
Use a limit reduce-only sell (for longs) at your target. For ladders, split size across two or three TP levels so one wick does not dump your entire edge at once. Our take-profit ladder guide covers multi-level exits.
4. Place reduce-only stop
Stop market or stop limit, always reduce-only, sized to the full remaining position. If you scale out at TP1, immediately reduce stop size to match residual exposure — leftover oversized stops are a common OCO failure mode.
5. Cancel the sibling after fill
When TP fills fully, cancel the stop. When stop fills, cancel remaining TPs. If only a partial TP fills, shrink the stop quantity to the new position size. Manual traders do this in seconds; bots should listen to fill events and cancel/replace atomically.
OCO Edge Cases That Hurt
- Partial fills — one leg fills 40%; the other still protects 100%. Always re-sync size.
- Non-reduce-only exits — a “close” that is larger than position can open the opposite side.
- Stale orders after manual flatten — you close by hand, forget working stops, and get re-entered.
- Gap through stop limit — in violent moves, prefer stop-market for hard invalidation if survival matters more than price.
- Funding and weekend gaps — wide stops on thin hours can still be correct if size is smaller.
Bracket Designs by Style
Scalper bracket
Tight stop, modest TP, high win-rate bias. Use IOC or market reduce-only for emergency flatten. Keep duration short so funding is noise. Compare fee impact in taker vs maker fees.
Swing bracket
Wider stop beyond structure, TP at next major level or measured move. Optional trailing stop after TP1. Isolated margin often cleaner for single-name swings — see cross vs isolated margin.
Bot bracket
Entry signal → submit TP + stop as reduce-only → on any fill event, cancel sibling and recompute. Add heartbeat cancel-all on disconnect. Our API trading bot guide is the next step if you automate.
Checklist Before You Walk Away
- Position size matches planned risk at the stop price.
- Both exit legs are reduce-only.
- TP and stop quantities equal open size (or sum of ladder legs equals size).
- No duplicate historical orders from earlier attempts.
- You know who cancels what after a partial fill — you or the bot.
Run Cleaner Exits on Hyperliquid
Join with code HOLYGRAIL, then default every close leg to reduce-only brackets.
Open Hyperliquid with HOLYGRAIL