Orders & execution
What are Bracket Orders and how do they automate profit targets and risk mitigation?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
A bracket order automatically places a profit-target limit order and a stop-loss order simultaneously alongside an entry, automating both risk control and gain-taking without manual follow-up.
How it works
Once the primary entry order fills, the paired profit and loss exit orders activate together, and filling one typically cancels the other, reducing the need for constant monitoring.
An example
A trader buys a stock at $50 with a bracket order setting a $55 profit target and a $47 stop-loss, both submitted automatically at entry.
Risk & limitations
Bracket orders rely on preset price levels that may not adjust to new information, so they can exit a position prematurely during normal volatility.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.