How to close a contract on Upbit

Closing contracts on Upbit involves identifying the type of contract you hold, checking position details, calculating profit and loss, deciding whether to close, and placing an appropriate order based on your decision and market conditions.

Nov 13, 2024 at 11:22 pm

How to Close a Contract on Upbit

Upbit, one of the world's leading cryptocurrency exchanges, offers a comprehensive suite of trading features, including contract trading. Contract trading allows users to speculate on the future price of an underlying asset without actually owning it. This can be a powerful tool for hedging against risk or profiting from price movements.

However, closing a contract can be a complex process, especially for those new to contract trading. This guide will provide a step-by-step walkthrough of how to close a contract on Upbit.

Step 1: Determine the Type of Contract You Hold

The first step in closing a contract is to determine the type of contract you hold. Upbit offers two types of contracts: perpetual contracts and futures contracts.

Perpetual contracts are contracts that do not have a fixed expiry date. They can be held indefinitely, and the price is continuously marked to the spot market price.

Futures contracts, on the other hand, have a fixed expiry date. Once the expiry date is reached, the contract will automatically settle at the spot market price.

The type of contract you hold will determine the steps you need to take to close it.

Step 2: Check the Position Details

Once you have determined the type of contract you hold, you need to check the position details. This will give you information about the contract's current price, the amount of leverage you are using, and the profit or loss (PnL) you have incurred.

To check the position details, go to the "Positions" tab in the Upbit trading interface. Here, you will see a list of all your open positions.

Step 3: Calculate Your PnL

Before closing a contract, it is important to calculate your PnL. This will help you to determine whether you are making a profit or a loss on the trade.

To calculate your PnL, simply multiply the difference between the current price of the contract and the price at which you entered the trade by the contract size.

If your PnL is positive, it means you are making a profit on the trade. If your PnL is negative, it means you are losing money on the trade.

Step 4: Decide Whether to Close Your Position

Once you have calculated your PnL, you need to decide whether to close your position. There are several factors to consider when making this decision, including:

• The current market conditions
• Your risk tolerance
• Your profit or loss target

If you believe that the market conditions are favorable and you have a high risk tolerance, you may choose to hold onto your position in the hope that the price will continue to move in your favor.

However, if you are concerned about the market conditions or you have a low risk tolerance, you may choose to close your position to lock in your profits or minimize your losses.

Step 5: Close Your Position

Once you have decided to close your position, you need to place an order to do so. To place an order, go to the "Order" tab in the Upbit trading interface.

Here, you will need to select the contract that you want to close and enter the desired order type. There are two types of orders that you can use to close a position:

• Market order: A market order is an order to buy or sell a contract at the current market price. Market orders are typically executed immediately.
• Limit order: A limit order is an order to buy or sell a contract at a specified price. Limit orders are only executed if the market price reaches the specified price.

If you are closing a position with a profit, you will need to place a sell order. If you are closing a position with a loss, you will need to place a buy order.

Once you have placed the order, it will be executed as soon as possible.