Reduce-Only Orders: What They Can Close
Check the intended position change and exact venue flag without treating reduce-only, close-all and trigger-close settings as interchangeable.
Write the intended position change first
A sell order can have several possible purposes: opening a short position, reducing a long one or closing part of an existing exposure. The word sell alone does not establish which purpose applies. Write the intended position change first, including the instrument and position side. Then check the exact closing flag described by the venue for that product.
Identify the exact closing flag and position mode
Reduce-only concerns the permitted direction of a position change. Under the documented Kraken rule, it restricts an order to reducing an existing position rather than adding exposure. That restriction is different from choosing a limit price or obtaining a fill. A record can correctly state closing intent while still showing that the order was rejected, canceled or never executed.
Read the venue-specific documented restriction
Position mode and closing flags need their own fields. Binance documents restrictions for reduceOnly and separate Close-All parameters; Bybit documents another set of flags and product conditions. Retain the original flag name and mode from the saved record. Replacing all of them with close position would hide distinctions that may explain why the venue handled an order differently.
Separate eligibility from actual execution
The simple position example assumes an applicable rule and an actual execution. It does not establish what every venue will do with an oversized closing amount or several competing closing orders. When those details are missing, preserve the requested amount and observed outcome without calculating an assumed result. The purpose of the sheet is to explain the intent that was recorded.
Keep the closing-intent record
Complete the worksheet with evidence from the position and order records you already have. Keep the existing position quantity, requested amount and final status separate, and identify the reference that explains the selected flag. A blank entry remains an unresolved fact rather than a zero. The TXT checklist is useful when reading an unfamiliar closing label before interpreting a result.
Documented venue distinctions
These statements apply to the named provider and documented product. They do not imply identical rules elsewhere.
- Kraken reduce-only restricts an order to reducing an existing position rather than opening or increasing one. Official reference.
- Binance USDⓈ-M documents distinct reduceOnly and Close-All restrictions, including position-mode constraints. Official reference.
- Bybit reduceOnly and closeOnTrigger are separate fields with product-specific limits. Official reference.
Hypothetical case
Hypothetical existing long position: 5 units. A reduce-only sell of 2, if executed under the applicable rule, reduces it to 3. The flag describes permitted intent; it does not guarantee an execution or a universal oversized-order outcome.
Six questions for your record
- Which existing position is intended to decrease?
- What position mode and product are recorded?
- What exact closing flag was selected?
- Does its documented rule apply here?
- Is the requested amount supplied rather than inferred?
- What outcome is confirmed by an own record?
Keep your own record
The CSV contains column headings only. The TXT contains the review questions and blank note spaces. Keep original evidence separately, preserve identifiers as text and leave missing facts unknown. Neither file sends data or performs an account check.