Glossary
What is Reduce-only order
An order flag: such an order can only reduce or close an existing position, and it will never open a new one or flip the current one to the opposite side.
How it works
Example
A 1 BTC long with a take-profit limit sell of 1 BTC and the flag on. The stop closes the long first and the take-profit is cancelled. Without the flag it would fill later and open a 1 BTC short.
Common mistake
Placing a take-profit and a stop without the flag and forgetting the second order: after one exits, the other can open a position you never wanted.
Read next
Related terms
Frequently asked questions
- Where can I learn Reduce-only order step by step?
- In the Trading OS Academy: “Stop and take-profit are orders, not intentions”.
- What is Reduce-only order related to?
- Limit order; Stop order (stop-market); Take-profit; Stop-loss.
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