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!