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  "id": "reduce-only-orders",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/reduce-only-orders/",
  "collection": "defi",
  "title": "Reduce-only orders: closing exposure without reversing it",
  "description": "Understand how a closing order can avoid opening a new opposite position, including rejection and resizing behavior.",
  "aliases": [
    "reduce only order meaning",
    "prevent a closing order from reversing a position"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T19:18:00.092Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "Reduce-only restricts an order to decreasing an existing position rather than increasing exposure or reversing its direction. It is useful when several closing instructions coexist, but the exact rejection, resizing and time-in-force rules are implementation-specific. The retrieved dYdX guide requires IOC for reduce-only orders.",
    "claimId": "reduce-only-orders-quick-answer",
    "sourceIds": [
      "x425-defi-dydx-reduce"
    ]
  },
  "keyFacts": [
    {
      "label": "Exposure",
      "value": "A reduce-only order cannot enlarge or flip the position under the documented rule.",
      "sourceIds": [
        "x425-defi-dydx-reduce"
      ],
      "id": "exposure",
      "claimId": "reduce-only-orders-fact-exposure"
    },
    {
      "label": "Policy",
      "value": "The cited dYdX guide supports reduce-only with IOC.",
      "sourceIds": [
        "x425-defi-dydx-reduce"
      ],
      "id": "policy",
      "claimId": "reduce-only-orders-fact-policy"
    },
    {
      "label": "Conditional orders",
      "value": "Documented stop/take-profit orders can resize to remaining position size when triggered.",
      "sourceIds": [
        "x425-defi-dydx-reduce"
      ],
      "id": "conditional-orders",
      "claimId": "reduce-only-orders-fact-conditional-orders"
    }
  ],
  "prerequisites": [
    "perpetual-futures"
  ],
  "sections": [
    {
      "id": "example",
      "heading": "Protect against an outdated close size",
      "sourceIds": [
        "x425-defi-dydx-reduce"
      ],
      "paragraphs": [
        "Suppose a trader is long 4 A of contract exposure and places two separate sell instructions. If the first closes 3 A, only 1 A remains long. An unrestricted later sell of 4 A could close that unit and establish a 3 A short. A reduce-only constraint prevents that reversal.",
        "This describes exposure, not ownership of spot tokens."
      ]
    },
    {
      "id": "behavior",
      "heading": "Rejection and resizing are different outcomes",
      "sourceIds": [
        "x425-defi-dydx-reduce"
      ],
      "paragraphs": [
        "The dYdX guide distinguishes oversized market/limit orders, which can be rejected, from reduce-only stop or take-profit orders that resize at triggering. Do not assume every platform silently trims every oversized order.",
        "The flag also does not create liquidity or remove price constraints. A valid reducing order can be partially filled or unfilled."
      ]
    },
    {
      "id": "verify",
      "heading": "Check what remains after execution",
      "sourceIds": [
        "x425-defi-dydx-screen",
        "x425-defi-dydx-reduce"
      ],
      "paragraphs": [
        "After a fill, inspect the actual position and any other live closing orders. A button labelled Close may apply useful defaults, but a separately submitted market order need not inherit them. The transaction record and position state are the evidence that exposure changed."
      ]
    }
  ],
  "faq": [
    {
      "question": "Can reduce-only open my first short position?",
      "answer": "No. With no long position to reduce, a sell that establishes a short contradicts the constraint.",
      "sourceIds": [
        "x425-defi-dydx-reduce"
      ]
    }
  ],
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      "statement": "Reduce-only restricts an order to decreasing an existing position rather than increasing exposure or reversing its direction. It is useful when several closing instructions coexist, but the exact rejection, resizing and time-in-force rules are implementation-specific. The retrieved dYdX guide requires IOC for reduce-only orders.",
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        "source-c3db43b5e8f8e4aa"
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      "sourceLocators": [
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          "locator": "Requirements; How it works"
        }
      ],
      "scope": {
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      "qualification": "",
      "evidenceStatus": "documented",
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        "method": "independent automated source review",
        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked dYdX reduce-only market/limit rejection versus conditional-order resizing; position cannot flip under documented constraint."
        ]
      }
    },
    {
      "id": "reduce-only-orders-fact-exposure",
      "articleSlug": "reduce-only-orders",
      "statement": "Exposure: A reduce-only order cannot enlarge or flip the position under the documented rule.",
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        "notes": [
          "Checked dYdX reduce-only market/limit rejection versus conditional-order resizing; position cannot flip under documented constraint."
        ]
      }
    },
    {
      "id": "reduce-only-orders-fact-policy",
      "articleSlug": "reduce-only-orders",
      "statement": "Policy: The cited dYdX guide supports reduce-only with IOC.",
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        "notes": [
          "Checked dYdX reduce-only market/limit rejection versus conditional-order resizing; position cannot flip under documented constraint."
        ]
      }
    },
    {
      "id": "reduce-only-orders-fact-conditional-orders",
      "articleSlug": "reduce-only-orders",
      "statement": "Conditional orders: Documented stop/take-profit orders can resize to remaining position size when triggered.",
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        "checkedAt": "2026-10-02T19:18:00.092Z",
        "reviewer": "Independent automated verification — Codex root, separate from the DeFi drafting agent",
        "notes": [
          "Checked dYdX reduce-only market/limit rejection versus conditional-order resizing; position cannot flip under documented constraint."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "x425-defi-dydx-reduce",
      "label": "Reduce Only Order",
      "publisher": "dYdX Operations Services",
      "url": "https://help.dydx.trade/en/articles/166978-reduce-only-order",
      "locator": "Requirements; How it works",
      "note": "Version-scoped IOC requirement and reduction behavior.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:20.744Z",
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    {
      "id": "x425-defi-dydx-screen",
      "label": "Interface of the Trade tab",
      "publisher": "dYdX Operations Services",
      "url": "https://help.dydx.trade/en/articles/166979-interface-of-the-trade-tab",
      "locator": "Orderbook; Position information; Stats",
      "note": "Definition and presentation of trading market metrics.",
      "version": "Documentation retrieved for the 2026-10-02 editorial scope; content hash recorded",
      "checkedAt": "2026-10-02T18:53:20.712Z",
      "contentSha256": "2548899a309c289e661f6f554a87ca26b9889d83ae3ac3cb9035ef8af84c7063",
      "recordId": "source-08e71d7fe0f46d5d"
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  ],
  "related": {
    "articles": [
      "take-profit-orders",
      "stop-loss-vs-stop-limit",
      "order-time-in-force",
      "post-only-orders"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and separate automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Reduce-only orders: closing exposure without reversing it.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/reduce-only-orders/"
}