How a position is modified and closed

What is actually being amended 

A stop or a take profit attached to an open position is not a property of that position in the way its size and its opening price are. It is a separate conditional instruction, resting against the position and waiting for a level. Amending it replaces the level on that instruction and does nothing else. The position keeps its opening price, its quantity, its opening time and everything that has accrued against it since. On a ticket the change reads as one field being edited. Underneath, one resting instruction is withdrawn and another is registered in its place.

That construction explains the rejections, which otherwise look arbitrary. An amendment is a new instruction and is validated like one. A level placed on the wrong side of the current price for the order type is refused. A level closer to the current price than the instrument's minimum distance convention allows is refused, and that minimum is a published property of the instrument and the venue rather than a fixed number across the market. An amendment sent while the instrument is not quoted is queued or refused depending on the venue. In every case the position itself is untouched, so a refused amendment leaves the previous level in force. Having an old level in force and having no level at all are different states, and a ticket that closes without a confirmation does not distinguish them.

What an amendment does not change 

Three things stay fixed while a level moves, and each is a common misreading. The opening price is fixed at the moment the position opened and no later instruction moves it, so moving a stop changes the distance between the entry and the level, never the entry. Nothing is realised, because nothing has been closed: the profit or loss shown against an open position is a running valuation of a contract still in force, and it becomes an amount that has actually happened only when a quantity is closed. And the financing clock is not reset, because it runs on the open contract rather than on the instructions resting against it.

Closing part of a position 

A partial close is an instruction to close a stated quantity smaller than the quantity open. Two separate things happen in the same moment, and separating them is most of this lesson. The profit or loss on the closed quantity stops being a valuation and becomes a realised amount, settled at the price the closing deal happened at. The quantity that was not closed carries on exactly as it was, at the original opening price. It is not re opened at the current price, and its running profit or loss is still measured from where the whole position began.

Exposure falls in proportion to the quantity closed, and everything derived from exposure falls with it. A position half closed responds to a one pip move with half the money it responded with before, because pip value is a function of size and nothing else in the calculation changed. The margin held against the position falls in the same proportion. That is the whole mechanical effect: same instrument, same direction, same opening price, smaller multiplier on every move from here.

The ragged edge is what happens to the instructions attached to the position. Conventions genuinely differ. Some platforms scale the quantity on an attached stop and take profit down to the quantity that remains, so the instruction continues to cover the whole of the position. Others leave the attached quantity as it was written, which leaves an instruction covering more than is open, and the surplus is either rejected when it triggers or reported as an error. Which behaviour applies is stated in the platform's own documentation, and it is visible on the ticket after a partial close rather than inferable from the order type.

Closing, and opening the opposite 

A close and an opposite deal look identical on a chart and are different arrangements underneath. A close instruction ends the contract. The difference is settled, the margin held against it is released, and nothing further accrues against it. An opposite deal on an account configured to net does the same thing, because the two contracts cancel and what is left is the difference between them. An opposite deal on an account that does not net creates a second contract that sits alongside the first. Both stay open, both consume margin, both accrue financing, and each carries its own attached instructions.

Net sensitivity to price in the second arrangement is nil, which is what makes it look like a closed position, and that is where the resemblance stops. The cost position is not nil. Two financing lines accrue rather than none, the second deal crossed the quote to open, and whatever charge the account levies per deal was levied on it and will be levied again on each of the two closings that eventually follow. Which behaviour an account has is a property of its configuration, stated in its terms, and it is not derivable from the instrument or from the order type used.

The clock does not stop until the contract does 

Because the full value of a CFD is not funded, a contract held past the daily cut off carries a financing adjustment for each night it stays open. Three consequences follow from the fact that the adjustment is calculated on the contract rather than on anything attached to it. Amending a level changes nothing about it. A resting instruction stops nothing while its level is unreached, however long that is. And a partial close reduces the size the adjustment is calculated on from the next cut off onward, while leaving everything already accrued exactly where it is.

The adjustment can be a debit or a credit depending on the instrument and on the direction of the contract, and the rates are published per instrument rather than being a single figure across a book. What is common to both signs is that the line accrues on the calendar and not on the price, so a position that has gone nowhere at all is still a position on which something has been calculated every night it stayed open.

Where practitioners disagree 

Closing part of a quantity rather than all of it is a long running argument, and both sides of it are about accounting rather than about mechanics. One tradition treats a partial close as the only way to change the size of an exposure without ending the contract that carries it, which keeps one opening price and one record instead of several. Another answers that the same idea is now spread over two closing deals, each crossing the quote and each carrying whatever charge is levied per deal, so the arithmetic of the original position is no longer recoverable from any single figure on a statement. Both descriptions are accurate, and neither settles what the practice costs, because one of the two effects is measurable and the other depends on a comparison with a position that was never held.

The narrower dispute concerns holding two opposing contracts on one instrument. One view holds that the arrangement preserves an original opening price and its record where a close would end both, and that this matters wherever reporting is done on individual contracts. Another view holds that an arrangement with no sensitivity to price and two financing lines is a closed position that is being paid for, and that describing it as a position at all obscures what it is. Some venues resolve the argument by configuration and net automatically, which is why the same instruction produces two different results in two places, and why the account's own terms are the only reliable statement of which one applies.