Kind of like trading on automatic pilot, the ‘if done’ order involves placing two sequential trades ahead of time. As the name suggests, the second order doesn’t become active until the first order is executed.
As an example, let’s say you placed a ‘limit order’ to sell 2000 XYZ at $6.90. Since you will lose money if XYZ increases in price, you may decide to place a second ‘stop’ order to buy 2000 XYZ at $7.10, but only should the first trade be executed, or ‘if done’. Once the market trades at a level to trigger the execution of the first order, the second order becomes active or pending in the market.