There comes a time when we have to bid farewell, or close, our positions. Whether you’re closing a position for a winner or waving the white flag, you have some options when it comes to how you want to manage your positions.
Let’s look at an example. Here, we have a portfolio that has 2 long 1000 strike puts and 3 short 1010 strike puts. At first glance, this looks like a short 1010/1000 put spread with an extra 1010 short put. Perhaps the extra 1010 short put is from another strategy or a ratio spread? Either way, the platform gives you the ability to manage this position in three different ways.
Upon closing this position, you will notice another menu appear beside it with three options on how you want to close it, as illustrated below.
These three closing order options may be confusing at first, but it can help you according to how you trade.
*Please Note: The ability to choose a closing order type will only appear with multi-lot positions, or a quantity greater than 1. Additionally, this feature is currently available only on the desktop platform.
Balanced, Default, & Full
Three Closing Order Types
Balanced Closing Order
Creates a closing order to an equal number of options contracts. Since this portfolio is short 3 of the 1010 puts and long 2 of the 1000 puts, by selecting “Balanced,” it will create an equal order based on the lower quantity to close.
Default Closing Order
Creates a closing order based on your platform’s default order quantity setting. The platform sets the default quantity" to 1 unless you have changed it. To learn how to change your default order quantity, please click here.
Full Closing Order
Just like the name states, this creates a closing order to close the entire position. If this order is sent and it gets filled, then the selected position will be completely closed out.