Bracket Order
A single entry order packaged with a take-profit and a stop-loss; when one exit fires, the other is automatically canceled.
A bracket order wraps an entry around two exit legs: a take-profit limit above (for longs) and a stop-loss below. The three legs form an OCO pair on the exit side — whichever exit triggers, the other is immediately canceled.
Bracket orders enforce trade planning at entry, eliminating the temptation to move stops or let winners run too long without a plan. Most retail platforms support them as a single multi-leg order.
The risk-reward ratio is visible and fixed at order placement, which supports consistent position sizing.
Example
Buy XYZ at $50.00. Bracket: take-profit at $54.00, stop-loss at $48.00. If $54.00 is hit first, the stop is canceled and vice versa.
Related Terms
One Cancels the Other (OCO)
A pair of orders where filling one automatically cancels the other — used to set simultaneous upside and downside exits.
BeginnerStop-Loss Order
A stop order placed to exit a position at a loss before it grows larger. The primary tool for managing downside risk.
BeginnerTake-Profit Order
A limit order placed above a long entry (or below a short) to automatically lock in gains when a target price is reached.
BeginnerTrailing Stop
A stop-loss that automatically moves in your favor as price advances, locking in profit while capping downside.
Intermediate