This article addresses our Global Derivatives offering, which is currently only available to eligible customers in supported regions outside of the U.S. Learn more about Coinbase's Derivatives products
A reduce only order ensures that you only close or reduce an existing position, never open a new one. It's most useful when you have multiple orders, like multiple take profit/stop loss orders, for the same position.
When creating a new order, toggle Reduce only on to place a reduce only order.
Purpose
Prevents you from accidentally reversing your position
For a long position, a reduce-only stop-limit sell order can reduce or close the position if it executes. Reaching the stop price activates the order but does not guarantee a fill.
Without a reduce-only order, the sell order could execute and open a new short position, creating unwanted exposure and risk
Example
You open a long 1 BTC PERP position at $100,000
You set a limit order to sell 1 BTC PERP at $110,000 and mark the order as reduce only
The price of BTC begins to drop so you close the position with a market order
Once the position has been closed, the reduce-only order cannot open a new short position.
Reduce only orders
Reduce-only is available for supported order types. Bracket orders and TP/SL orders are automatically set to reduce only.
Check the order form for the available settings.