What is Reduce Only in Futures Trading?
August 21, 2026 at 12:56 PM1. What is Reduce Only?
Reduce Only is an order setting in Futures Trading that allows an order to only reduce or close an existing position.
When Reduce Only is enabled, the order will not increase your current position size and will not open a new position in the opposite direction.
In simple terms:
Reduce Only helps you close or reduce a futures position without accidentally opening a new position.
2. When should I use Reduce Only?
You may use Reduce Only when you want to:
- Close part of your existing position
- Fully close your existing position
- Place a closing limit order
- Avoid accidentally opening an opposite position
- Manage risk when closing futures trades
For example, if you only want to close your BTCUSDT Long position, you can enable Reduce Only to make sure the order does not create a new Short position.
3. Example
Assume you currently hold a BTCUSDT Long position of 1 BTC.
If you place a Sell order with Reduce Only enabled:
| Order Size | Result |
|---|---|
| Sell 0.5 BTC | Your Long position is reduced from 1 BTC to 0.5 BTC |
| Sell 1 BTC | Your Long position is fully closed |
| Sell 1.5 BTC | The order will only be allowed to reduce/close the existing 1 BTC position. It will not open an extra 0.5 BTC Short position |
4. What happens if I enable Reduce Only without an existing position?
If you do not have an existing position, a Reduce Only order cannot open a new position.
This means the order may fail, be rejected, or not be placed because there is no position to reduce.
5. Why was my Reduce Only order rejected or cancelled?
A Reduce Only order may be rejected or cancelled if:
- You do not have an existing position to reduce
- The order size is larger than the available position size
- The position was already closed before the order was executed
- Another closing order has already reduced or closed the position
- The order may increase exposure instead of reducing the position
Please check your current position size and any existing open orders before placing a Reduce Only order.
6. Does Reduce Only guarantee my position will be closed?
No. Reduce Only only controls the purpose of the order. It makes sure the order can only reduce or close a position.
It does not guarantee execution.
For example, if you place a Reduce Only Limit order, it will only execute when the market price reaches your limit price and there is enough market liquidity.