To close a position is to eliminate its remaining exposure through an offsetting transaction or the product’s settlement process. A partial close removes only part of the exposure and leaves a smaller position open.
Sending an order is not completion
An ordinary long derivative position is typically closed by selling, and a short by buying. The account mode and order instructions must identify the intended position. In hedge mode, opening the opposite side may create another position instead of closing the first.
A closing limit order can remain unfilled. A market order prioritizes execution but may fill at several prices with slippage. The completed fills, not the requested price, determine the actual exit and trading result.
Avoid unintended reversal
In a netting system, an oversized opposite order can close the existing position and open a new one in the other direction. A supported reduce-only instruction can prevent increasing or reversing exposure, subject to the venue’s implementation.
After closing, verify the remaining quantity, pending exit orders and realized result. Fees and accrued funding can change the net outcome. Closing a borrowed-asset trade may also leave a loan that must be repaid separately.