Sell or Sell to Close Order Type

Futures Trading Platforms Optimus Flow
1

I’m a new trader trying to wrap my head around closing out futures positions. I understand that when you are long a futures contract, you can close your position by selling it. However, I’m confused about the difference between a regular “Sell” order and a “Sell to Close” order when closing a long position.

Could someone please explain what the difference is? My specific questions:

  • If I currently have 1 long /MES contract and I want to close this position, should I place a “Sell” or “Sell to Close” order?

  • I believe “Sell to Close” closes your existing long contract. But does a regular “Sell” order also close your long position? Or does it open up a new short position instead?

  • When closing a long futures contract, is “Sell to Close” the specific order I need to use? Or will a regular “Sell” work just the same?

I’ve tried reading explanations online but am still fuzzy on the nuances. Want to make sure I understand this correctly before putting on any real trades. Any clarification on how “Sell” vs “Sell to Close” works when closing longs would be greatly appreciated!

Thank you,
K

2

Welcome @Keco! I’m glad you found our community. Regarding closing out a long futures position, pressing either the “Sell to Close” or just “Sell” button will offset and close out your long position.

It’s important to be aware of any other active orders you have for that contract, like stop losses or limit orders, since those won’t automatically cancel when closing the position. Make sure to cancel them if you don’t want them firing off.

Also, in the US futures markets, you can’t be simultaneously long and short the same contract/expiration date. So whichever “Sell” order you use will flatten out your position.

Some trading platforms cater to both futures and equities, where short selling has different margin rules, so they want to distinguish “Sell to Close” from just “Sell.” But in our futures-only platform, the margin requirements are the same whether you’re long or short the futures contract.

Let me know if you have any other questions!

Best,
Matt Z
Optimus Futures