Inverse Position Opening Explanation
Inverse position opening refers to the operation of closing the current position while simultaneously opening a new position in the opposite direction. This operation is typically used for quickly changing the direction of a trade.
Market Optimal Price Inverse Position Opening Process
- Close Current Position: First, use a market order to close your existing contract position.
- Open Inverse Position: Immediately open an equal amount of contracts in the opposite direction using a market order.
Implementation Methods
Exchanges typically offer two methods:
- One-Click Inverse Function:
- Most mainstream exchanges (such as Mini, Binance, OKX, etc.) provide a "one-click inverse" button.
- The system will automatically execute both the closing and inverse opening operations.
- Usually, the same amount of inverse position is opened at the market optimal price.
- Manual Operation:
- First, submit a market order to close the position.
- After the closing is completed, immediately submit a market order to open the inverse position.
Precautions
- Slippage Risk: Market orders may incur slippage due to market volatility.
- Fees: Includes fees for both transactions (closing and opening).
- Liquidity: Ensure there is sufficient market liquidity to complete large trades.
- Price Differences: There may be slight differences between the closing price and the new opening price.
Applicable Scenarios
- Rapid reversal trading strategies.
- When significant news or trend reversals occur in the market.
- To hedge existing position risks.