# What does reduce-only mean?

Stage 4 · Raise the frame (orders and bots that follow the plan) · Updated 2026-10-29

A reduce-only order can only make an open position smaller. On Hyperliquid it reduces the current position instead of opening a new one in the opposite direction. It matters most for exits: a sell stop left behind after a long is closed by hand would open a short if it were a plain order; reduce-only, it has nothing to reduce and opens nothing.

## In short

- A **reduce-only** order can only make an open position smaller. It never opens one, and never turns a long into a short.
- Without it, a sell against a long first closes the long, and any amount beyond the position’s size opens a **short**.
- A long of 40 closed by hand at 101, with a plain sell stop for 40 left at 97.50: if the price falls through it, the account is short 40.
- If the price then climbs back to 103, that short is **−$220**, on a trade its owner thought was finished.
- In BuildTrade™, a Trail order is always reduce-only, and the order ticket has a **Reduce only** switch for the other types.

## What reduce-only means

On Hyperliquid a position in a market is one net amount. A buy adds to a long or reduces a short; a sell adds to a short or reduces a long. When an order is larger than the position it works against, the part beyond the position’s size opens a new position the other way.

A **reduce-only** order removes that last step. Hyperliquid’s docs describe it as an order that reduces a current position as opposed to opening a new position in the opposite direction. It can bring a position down to zero, never past it.

## The stop left behind

Take a long of 40 units at 100 with a sell stop for all 40 at 97.50. The price rises to 101 and the long is closed by hand, for +$40. The stop is still waiting.

If it is a plain order and the price later falls to 97.50, it sells 40 units against no position and opens a short of 40. If the price then climbs back to 103, that short is −$220. Sent reduce-only, the same stop has nothing to reduce and opens nothing.

## Where it fits

Reduce-only fits orders whose only job is to exit: stops, take profits and partial closes. It keeps them from outliving the position, or from overshooting it after part of the position has already been closed another way.

It is the wrong switch for an order meant to open a position or add to one. A reduce-only buy with no short open has nothing to reduce.

## On Hyperliquid

Reduce Only is one of Hyperliquid’s order options, and every order sent to it carries a reduce-only flag, on or off.

In BuildTrade™, the order ticket has a Reduce only switch, and the confirmation shows Reduce only: Yes when it is on. A reduce-only order is sent without the ticket’s take-profit and stop-loss prices, because it only closes. A Trail order is always reduce-only. The Positions tab lists a position’s reduce-only stops and take profits as its exits.

## The same stop, plain and reduce-only

_Example numbers._

A long of 40 units at 100, closed by hand at 101 with its sell stop for 40 at 97.50 left in place. The price then falls through the stop and climbs back. Fees, funding and slippage are left out.

- Long, units: 40
- Entry price: 100.00
- Closed by hand at: 101.00
- Closed profit: +$40
- Sell stop left behind, trigger: 97.50

| Price, in time order | Position, reduce-only stop | Position, plain stop | Open PnL, plain stop |
| --- | ---: | ---: | ---: |
| 101.00 | 0 | 0 | $0 |
| 99.00 | 0 | 0 | $0 |
| 97.50 | 0 | −40 | $0 |
| 96.00 | 0 | −40 | +$60 |
| 99.00 | 0 | −40 | −$60 |
| 101.00 | 0 | −40 | −$140 |
| 103.00 | 0 | −40 | −$220 |

The reduce-only stop leaves the account flat whatever the price does. The plain one turns a closed trade of +$40 into an open short that is −$220 at 103, and goes on moving with the price until it is closed.

## Mistakes that cost traders money

- **Closing by hand and forgetting the stop.** A plain stop still waiting after its position is gone can open a new position the other way when it triggers.
- **Expecting reduce-only to open a trade.** A reduce-only order with no position to work against has nothing to reduce, so it cannot open one.
- **Sizing an exit larger than the position.** Without reduce-only, the part of an exit beyond the position’s size opens a position the other way.
- **Assuming every exit is reduce-only.** It is a flag on each order. Check the confirmation, or the order’s details on the venue, before relying on it.
- **Using reduce-only to add to a position.** It can only make a position smaller. Adding needs an order without it.

## Try it in BuildTrade™

Before closing a position by hand, open the Open Orders tab on the Trade screen and look for stops and limits on the other side of the same coin. Any that is not reduce-only can open a new position when it fills.

Open the app: https://trade.buildtrade.app/register

## Words in this guide

- [Reduce only](https://buildtrade.app/glossary/#reduce-only)
- [Stop loss](https://buildtrade.app/glossary/#stop-loss)
- [Take profit](https://buildtrade.app/glossary/#take-profit)

## Sources

- [Order types](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/order-types), Hyperliquid Docs.
- [Exchange endpoint](https://hyperliquid.gitbook.io/hyperliquid-docs/for-developers/api/exchange-endpoint), Hyperliquid Docs.

BuildTrade™ is independent of, and not endorsed by, Hyperliquid.

Web page: https://buildtrade.app/guides/reduce-only-orders/