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What are Combination and If Done Orders?

If Done Conditional Order
Written by David

Of course, you can be really flash and place a combination of stop and limit orders – commonly referred to if done or contingent orders

Example: You are going away and cannot watch the action. The current price for September FTSE is 4200. You think the market will rise by 100 points and then suffer a sharp downwards adjustment. Also, you want to limit your losses to £1000. Here’s the order:

‘Sell September FTSE, £10/point, limit 4300, stop 4400.’

Ok, let’s decode that.

First, you are selling the FTSE, which means you expect the price to drop. Next, you think it will rise a little first. Normally you would wait for that rise, and then place your sell order, but you can’t because you’re too busy. The limit order takes care of that. It instructs the broker to sell if the price rises above 4300. Assuming this happens, the DOWN bet will be placed automatically for you, at 4300, without further instructions from you.

Next, let’s say the market moves against you – it continues to rise and does not drop as you predicted. If it rises to 4400, it triggers your stop loss order and your position is automatically closed, leaving you with losses of £1000. Of course, if the market does drop, the stop order has no effect and you just take your profits.

Another linked order is referred to as the ‘One Cancels the Other (OCO) Orders’. Should the take profit and stop loss be active concurrently in a market at the same time, when one of them triggers, the other order might be left in the market and could potentially executed an unwanted spread trade. To protect against this, these two orders can be linked together into an OCO order. In this setups, as soon as one of the orders executes, the other order gets automatically cancelled.

About the author


I first cut my teeth in the Square Mile in the winter of 2002. I was young, fresh-faced and straight out of university; keen but maybe a little naïve about the way the investment world really worked… A few years ago I discover a whole new world of opportunity: spread betting on the financial markets.

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