How to close Bitfinex contract

How to Close Bitfinex Contract

Navigating the dynamic world of cryptocurrency trading involves utilizing various platforms and understanding their specific functionalities. Among the prominent names in the industry, Bitfinex stands out as a popular exchange for traders seeking advanced features and a comprehensive selection of assets. This guide will delve into the intricacies of closing contracts on Bitfinex, empowering traders with the knowledge to effectively manage their positions.

Before embarking on the steps outlined below, it is imperative to acknowledge the varying types of contracts available on Bitfinex:

• Perpetual Contracts: These contracts, also known as perpetual swaps, do not have an expiration date and can be held indefinitely. They emulate the behavior of a futures contract but without the need for physical delivery.
• Futures Contracts: Unlike perpetual contracts, futures contracts have a predefined expiration date. Traders seeking to close futures contracts must do so before their expiry date to avoid automatic settlement at the underlying asset's spot price.

Now that we have established the types of contracts on Bitfinex, let us delve into the detailed steps involved in closing each type:

Closing Perpetual Contracts

1. Identify the Contract: Begin by selecting the specific perpetual contract you wish to close from your Bitfinex account dashboard. Locate the "Open Positions" section and click on the contract in question to access its details.
2. Determine the Position: Once the contract details are displayed, ascertain whether your position is long (betting on an asset's price increase) or short (anticipating a price decrease). This understanding will guide your subsequent actions.
3. Enter Closing Order: To close a perpetual contract, you must enter an opposite order to your current position. For instance, if you hold a long position, you will need to place a sell order of an equivalent amount. Conversely, if you have a short position, you will need to place a buy order.
4. Submit and Confirm: Once the closing order parameters are set, carefully review the order details to ensure their accuracy. When satisfied, click the "Submit Order" button and confirm the action in the subsequent pop-up window.

Closing Futures Contracts

1. Identify the Contract: As with closing perpetual contracts, start by identifying the futures contract you want to close from your Bitfinex account dashboard. Locate the "Open Positions" section and click on the contract to access its details.
2. Determine the Expiration: Unlike perpetual contracts, futures contracts have a defined expiration date, which is crucial in their closure process. Pay close attention to the expiration date before proceeding further.

3. Manage Position: To close a futures contract, you can adopt one of two approaches:

   • Offsetting Position: Place an opposite order of equal size to your existing position. This effectively cancels out the position and closes the contract.
   • Delivery: Allow the contract to expire, which will result in physical delivery of the underlying asset. This option is typically not preferred by traders seeking to close their positions without owning the asset physically.
4. Monitor and Adjust: Regularly monitor the status of your closing order in case any adjustments are necessary. Keep track of the order execution status, ensuring that the contract is successfully closed before its expiration date.