Reduce Only Order

Read on to find out about Reduce Only Orders

dYdX Operations Services Ltd. avatar
Written by dYdX Operations Services Ltd.
Updated over a week ago

Reduce-Only is available on all order types:

  • Market

  • Limit

  • Stop Market

  • Stop Limit

  • Take Profit Market

  • Take Profit Limit

  • Trailing Stop

Requirements

On dYdX, Reduce-Only is compatible with any order type, as long as the order is Immediate-Or-Cancel (IOC). At this time, we do not support Reduce-Only for orders that sit on the book like Good Til Time (GTT).

How It Works

Reduce-Only ensures that your order:

  1. Will only reduce the size of your current position, not increase

  2. Will not open a position with side opposite to your current position (long to short or short to long)

You can enable Reduce-Only through the "Advanced" menu for any order type:
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The mechanism for Reduce-Only depends on the order type you are using:

Market and Limit

Since orders have to be IOC to enable Reduce-Only, Market and Limit orders are handled in the same way if they are Reduce-Only. If your Market or Limit order would cause your position to increase or change sides, the order will be rejected.

Reduce-Only is not enabled by default for Market and Limit orders. The exception is when placing a Market order through the "Close Position" modal, where Reduce-Only is always enabled.

Stop and Take Profit

You can set an order size of any amount for all Reduce-Only Stop and Take Profit orders. When your Stop or Take Profit order triggers, the order will automatically be resized to your remaining position size (if your order size is greater than your position size) before it fills.

Reduce-Only is enabled by default for all Stop and Take Profit orders.

Examples

Let's say you have a 5 ETH-USD LONG open.

  • If you try to place a Reduce-Only order to SELL 6 ETH, you will receive an error and won't be able to place the order.

  • If you try to place a Reduce-Only order to BUY any size, you will receive an error and won't be able to place the order.

  • If you place a Reduce-Only Stop Market SELL 6 ETH, you will be able to place this order with a valid trigger price. When your order triggers, the size of your order will automatically be resized from 6 ETH to 5 ETH. Then, the remaining SELL 5 ETH order will execute to fully close your LONG position to 0.

Disclaimer and Terms

This document may provide information with respect to the dYdX Chain software, and/or non-mandatory guidelines and suggestions that may help with using dYdX Chain software. dYdX Operations Services Ltd. does not run dYdX Chain validators nor operate or control the dYdX Chain network. dYdX Operations Services Ltd. is not responsible for any actions taken by other third parties who use dYdX Chain software. dYdX Operations Services Ltd. services and products are not available to persons or entities who reside in, are located in, are incorporated in, or have registered offices in the United States or Canada, or Restricted Persons (as defined in the Terms of Use). The content provided herein does not constitute, and should not be considered, or relied upon as, financial advice, legal advice, tax advice, investment advice or advice of any other nature, and you agree that you are responsible to conduct independent research, perform due diligence and engage a professional advisor prior to taking any financial, tax, legal or investment action related to the foregoing content. The information contained herein, and any use of products or services provided by dYdX Operations Services Ltd., are subject to the Terms of Use.

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