How to close Kraken contracts

How to Close Kraken Contracts

Closing a Kraken contract involves several steps that ensure the orderly termination of your position in the derivatives market. Here's a comprehensive guide to help you navigate the process:

Step 1: Understanding Position Closure

• Closing a contract refers to the act of exiting an open position by taking an opposite position of equal size.
• This involves selling a contract that you previously bought or buying back a contract you previously sold.
• By closing a contract, you effectively neutralize your exposure to the underlying asset and end your involvement in the derivatives market.

Step 2: Navigating the Kraken Interface

• Access the Kraken Futures dashboard to manage your open positions.
• Select the "Positions" tab to view a list of your active contracts.
• Identify the contract you wish to close and click on the "Close" button.

Step 3: Calculating Profit and Loss

• Before closing a contract, it's essential to calculate your profit or loss (P/L).
• The P/L is determined by the difference between the current market price and the price at which you opened the contract.
• Kraken provides real-time P/L calculations, which you can view by hovering over the "P/L" column in the "Positions" tab.

Step 4: Setting the Order Type

• Kraken offers various order types for closing contracts:

  • Market Order: Executes your order immediately at the current market price.
  • Limit Order: Allows you to specify a desired price at which your order will execute.
  • Stop-Limit Order: Triggers an execution when a specified stop price is reached and executes at a specified limit price.

Step 5: Entering Order Details

• Specify the order type, quantity, and any other necessary parameters, such as the limit price for limit orders.
• Pay attention to the minimum order quantities for different contracts.
• Review the order details before submitting to ensure accuracy.

Step 6: Confirming Order Execution

• Once you click the "Close" button, Kraken will attempt to execute your order.
• Execution may take a few seconds or minutes, depending on market conditions.
• You will receive a confirmation message once the order is filled and your contract is closed.

Step 7: Managing Open Contracts

• Repeat steps 2-6 to close additional open contracts as needed.
• Once all open contracts are closed, your exposure to the underlying asset is neutralized, and you have completed the process of closing Kraken contracts.