Closing a Trade/Contract
The process of settling an open position by executing an offsetting trade, ending exposure to price movement.
Closing a trade or contract is the act of exiting an open position to settle any gains or losses. This is done by placing an equal and opposite order to the original trade. In CFDs and futures, closing a contract ends the obligation before expiration. The process converts unrealised profits or losses into realised ones credited or debited to your account.
How It Works
- To close a buy trade, place a sell order of the same size on the same instrument
- Market orders close immediately at current price; limit orders close at a specified price or better
- Most brokers offer a one-click close button on open positions
- Futures and options can also be closed by letting them expire
Trading Tips
Decide your exit strategy before entering a trade. Know where you will take profit and cut losses.
In fast-moving markets, use market orders to close immediately rather than limits that may not fill
Be aware of swap fees when holding overnight. Closing before the daily rollover avoids these charges.
Related Terms
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