This article addresses international perpetuals (derivatives) available outside of the United States. Learn more about Coinbase’s Derivatives products on the Derivatives help page.
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.
If you have a long position and a stop-limit order to sell if the price drops, a reduce-only order ensures that if the stop-limit is triggered, your position is closed.
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 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.
Since your BTC PERP position no longer exists, the reduce-only limit order will automatically be cancelled.
Order types
Available for:
Market orders
Limit orders
Stop-limit orders
TWAP orders
Note: TP/SL orders are automatically set to reduce-only