Reduce-only order
A reduce-only order can only decrease an existing position; the exchange will not let it open a new position or increase the current one. It is used for take-profit and stop orders so that, if the position has already been closed by another order, the exit order cannot turn into an unwanted entry in the opposite direction.
Senzoukria · Glossary · Updated September 2026
The problem it solves
A long position of 1 BTC has a take-profit sell limit and a stop sell order working. The position is closed by the take-profit. The stop is still in the book, and if price later falls to it, a plain stop would sell 1 BTC and open a short that nobody intended. With the reduce-only flag, the stop can only reduce a long position; with no position left, it has nothing to reduce, so it cannot open the short.
The same protection applies to size: a reduce-only order larger than the remaining position is limited so that it does not flip the position through zero.
Where it is used
- Take-profit and stop orders attached to a position.
- Scaling out in several limit orders whose total might exceed the position after partial fills.
- Automated strategies, where a race between two exit orders could otherwise leave an opposite position.
- Binance's futures API documents a reduceOnly parameter and states that it cannot be sent in hedge mode, where long and short positions are held separately.
The equivalent problem on futures platforms
CME futures traded through a broker do not always offer a reduce-only flag at the order level, so platforms manage the risk themselves, usually by linking exit orders as one-cancels-other brackets and canceling them when the position closes. A stop left working after the position is flat is no longer a protection but an entry order.
In Senzoukria
Crypto charts in the desktop are analysis only, so no crypto order is sent. On futures broker accounts, the desktop cancels the protective orders of a position as soon as that position closes, because a stop left in the book would open a position the trader did not ask for; resting entry orders placed deliberately while flat are left alone. The Protections panel shows the exit orders received for each open position, so a leftover exit order is visible before it can act.
Related
In the same section
- Requoting
- Recovery factor
- Research record
- Recency bias
- Reset fee
- Realized volatility
- Responsive activity
- Range midpoint
Sources
This page in other languages
Frequently asked questions
- What happens to a reduce-only order if my position is already closed?
- It cannot execute as a new position. Depending on the exchange, it is canceled or remains inactive until a position exists that it can reduce. It will not open a position in the opposite direction.
- Do I need reduce-only if I use bracket orders?
- A properly linked bracket cancels the remaining exit when one fills, which covers the most common case. Reduce-only adds a second safeguard for situations the link does not cover, such as a manual close or a partial fill.