Introduction to Reduce Only Orders

Available as an additional option to limit orders, Reduce Only orders serve to strictly reduce your position size by dynamically reducing or adjusting your limit order's contract quantity to match the contract size of the open position. This ensures that your position will not be unintentionally increased. 

Main purpose for trading

By selecting the Reduce Only option with your limit orders, traders can ensure a limit order set to take profit will not be unintentionally executed as a new position with the opposite direction in the case that the current position has been already closed/stopped out/liquidated. 

Example

Trader A currently holds Buy Long 1 BTC of BTCUSDT contracts at USD 5,000 and also sets a stop loss order at USD 4,800. In addition, Trader A also wants to set a take profit/partial take profit order with a limit price set at USD 5,200. The following are 2 examples of Trader A setting a Take Profit with and without selecting the Reduce Only order option:

• Without Reduce Only option

If Mark Price triggers the order’s stop-loss first and then proceeds to rise back to USD 5,200, the previous take profit limit order will likely be fulfilled, causing the trader to open an unintended Sell position at USD 5,200.

• With Reduce Only option

If the Last Traded Price triggers the order's stop loss first, the corresponding take profit limit order at USD 5,200 will automatically be canceled, thereby ensuring its non-execution to prevent future unintended opening of positions.