Closing a position

Ending an open position by entering the equal and opposite contract in the same instrument with the same firm, so the two net to nothing. What remains is the difference between the opening and closing prices. The unrealised figure becomes realised at that moment, and the balance moves once, net of commission and any financing already applied.

Three things happen together at the close. The margin held against the position is released back into free margin. The running unrealised figure stops moving and is written to the balance as a realised amount. And the position leaves the open positions list for the account history, where it can be read with its opening price, its closing price and every cost applied to it in between. A partial close does the same for part of the size and leaves the remainder open on the original opening price.

The most common misreading is that closing is a sale to somebody else. It is not: a contract for difference can only be closed with the firm that wrote it, there is no secondary market for it, and nothing is transferred to a third party. The second is expecting an automatic close to occur at the level named. A stop or a take profit is an instruction that becomes executable when the market reaches its level, and it is then filled at the next available price, which in a fast or gapping market can be some distance from it.