Closing a position

Ending an open position by trading the same size in the opposite direction, which turns unrealised profit or loss into a realised result and releases the collateral that was backing it.

Definition

To close a position is to take the opposite side of it for the same size. A long is closed by selling, a short by buying. At that moment the profit or loss stops moving, the collateral is released back into your balance, and any funding or borrow fees still owed are settled.

Full close and partial close

Closing part of a position leaves the rest running. That is useful for taking some profit off the table, but it changes the arithmetic of what remains.

If you reduce size while leaving all the collateral in place, the remaining position becomes less leveraged and its liquidation price moves further away. If collateral is withdrawn proportionally, leverage stays where it was and so, roughly, does the liquidation price. Some interfaces make this an explicit choice, often labelled keep leverage.

The costs at the exit

A close is a trade and is charged like one. A market close pays the taker fee and whatever slippage the book imposes at that size; a limit close can earn the maker fee but may not fill.

The exit fee is the one traders most often leave out of their planning, because it is paid at a moment when attention is on the price rather than the cost.

What can close a position without you

Liquidation, if equity falls below the maintenance margin. A trigger order you placed earlier. And on some venues, auto-deleveraging, which can close a profitable position to cover losses the protocol could not otherwise absorb.

Where you will run into it

The close dialog on a perpetual DEX is where order type, size, and the reduce-only flag come together, and it is the same screen used to attach take-profit and stop-loss levels on many venues.