How to Place "One Triggers Other" Orders

One Triggers Other (OTO) allows you to enter an initial order and place a second order contingent upon the fill
of the first order. This type of order entry can be utilized when trading stocks or options. There are unlimited ways
to make the most of this feature, but to demonstrate how OTO works let's discuss one of the more popular uses.

A common use of the OTO is to place a limit order to buy an option contract at a specific price and then place a
sell stop order that will be automatically entered upon the execution of the initial buy order. Let's do an example
using a IBM call option to further explain this topic.

The trade you are going to enter is a buy of an IBM January 80 call at a limit price of 4.70.

1. Enter the order

Once you are in the options order entry screen, you enter ".IBMAP" Buy To Open at a limit price of 4.70.

Next, click on the drop down arrow in the Advanced Orders box and click on [One Triggers Other : Options]

Now click the Preview button to enter the second order.

2. Preview the OTO order

Notice the blue box above the second order entry screen that restates the primary order. This is the screen
where the second, or OTO, order is entered. In our example, the order is a sell stop. After the information is
entered, click the Preview button once again to review the entire order.
3. Order review
Do a final review of the order you are about to place, and make any changes necessary before clicking the Place
Order button.

4. Trade confirmation
After you place the order, you will see a confirm page assuring you that your order was sent. To see the status of
your order, click the Check Order Status button; or if you would like to keep trading you can click the Place
Another Option Trade button.

5. Order status
The status of your order can be viewed in the standard order status page. You can view this page by either
clicking on the check order status link on the confirm page or you can click the trade tab and then select order
status.

After the buy of the IBM call option has been filled, the computer will then send the second order to market
automatically. The second order is a sell stop, which will limit the loss if the market moves against the long
position.

The OTO feature allows customers to be very creative when placing orders. Below are just a few of the different
orders that can be placed using the OTO trading platform.
Example 1 (leg into a covered call):
1. First order - buy a stock at a limit Price.
2. OTO order - sell a call against the stock you just purchased.

Example 2 (use proceeds from a sale):

1. First order - sell an option contract that you are long in your account at a limit price.
2. OTO order - buy a different option contract.

Example 3 (leg into a put spread):

1. First order - buy a put at a limit price.
2. OTO order - sell a put at a limit price.

Summary
The second order is held in our database until the first order is executed. After the execution is reported the
second order is then sent to market.