# Post-Only and Reduce-Only Orders

> Post-only orders guarantee you add liquidity and pay maker fees; reduce-only orders can only shrink a position. Learn how both work on crypto and futures venues.

Source: https://learn.tradelabsai.com/orders/post-only-and-reduce-only-orders/  
Track: Orders and Execution · Level: Intermediate · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Post-Only and Reduce-Only Orders", https://learn.tradelabsai.com/orders/post-only-and-reduce-only-orders/

Post-only and reduce-only are order instructions common on crypto exchanges and many futures platforms. A **post-only** order is a limit order that will only rest in the order book; if it would trade immediately, it is cancelled or repriced instead. A **reduce-only** order can only decrease an existing position; it can never open a new one or increase your size. Both protect you from expensive or dangerous accidents.

## Post-only orders

Exchanges often charge **takers**, orders that trade immediately, a higher fee than **makers**, orders that rest and add liquidity. Some even pay makers a rebate. A post-only order guarantees you are a maker.

**Example: Post-only avoiding a taker fill**
Bitcoin is quoted $61,000 bid and $61,005 ask. You place a post-only buy limit at $61,005, intending to join the bid but mistyping the price. A normal limit would fill immediately at the ask as a taker. The post-only order is rejected (or, on some exchanges, moved to $61,000) because it would have taken liquidity.

### Why it matters

| | Maker fee | Taker fee |
|---|---|---|
| Example exchange schedule | 0.02% | 0.05% |
| On $100,000 traded per day | $20 | $50 |
| Over 250 trading days | $5,000 | $12,500 |

For active traders, the difference between maker and taker fees can be larger than any other cost. Post-only enforces the cheaper side. See [Commissions and Fees](https://learn.tradelabsai.com/orders/commissions-and-fees/).

### The trade off

Post-only orders never cross the spread, so they never fill instantly. If the market moves away, you miss the trade. They suit patient entries and market making, not urgent exits.

## Reduce-only orders

On derivatives venues, especially crypto perpetual futures, you can easily flip from long to short by selling more than you own. A reduce-only order prevents that.

**Example: Reduce-only protecting a stop**
You are long 2 BTC perpetual contracts with a take profit sell limit for 2 and a stop sell for 2. The take profit fills and you are flat. Without reduce-only, the stop is still live: if the price later falls to it, it sells 2 contracts and opens a new short you never intended. With reduce-only on both exits, the stop can only reduce a position that no longer exists, so it is cancelled or does nothing.

### Where reduce-only helps

- **Stops and take profits** on futures and perpetuals, especially when several exit orders exist.
- **Partial exits** where you want to make sure you never oversell.
- **Managing positions across devices or bots,** where one order might fill while another is still active.

Many exchanges also mark close position orders as reduce-only automatically. See [Perpetual Futures](https://learn.tradelabsai.com/crypto/perpetual-futures/).

## Similar instructions elsewhere

Stock brokers rarely use these exact names, but similar protections exist: bracket orders with linked exits prevent accidental reversal, and some platforms reject sell orders larger than your position in a cash account. See [Bracket Orders](https://learn.tradelabsai.com/orders/bracket-orders/) and [OCO Orders](https://learn.tradelabsai.com/orders/oco-orders/).

## Common mistakes

- **Using post-only for exits that must happen,** like a stop loss.
- **Forgetting reduce-only on stops** after taking partial profits, leaving oversized stops in the book.
- **Assuming post-only orders always rest.** Check whether your exchange rejects or reprices crossing orders.

## Frequently asked questions

### What does post-only mean?

It means the limit order will only be accepted if it adds liquidity to the order book; it will not execute immediately against an existing order.

### What does reduce-only mean?

It means the order can only reduce or close an existing position, never open or increase one.

### Should I use reduce-only on all exit orders?

On futures and perpetual swaps it is a sensible default for stops and take profits, because it prevents accidental new positions.

## Sources

- Wikipedia, [Order (exchange)](https://en.wikipedia.org/wiki/Order_%28exchange%29)

## Continue learning

- Next lesson: [Matching Engines](https://learn.tradelabsai.com/orders/matching-engines/)
- Previous lesson: [Pegged and Midpoint Orders](https://learn.tradelabsai.com/orders/pegged-and-midpoint-orders/)
- Related: [Pegged and Midpoint Orders](https://learn.tradelabsai.com/orders/pegged-and-midpoint-orders/): Pegged orders move automatically with the bid, ask or midpoint. Learn primary, market and midpoint pegs, how they save spread costs and the risks of chasing.
- Related: [Limit Orders](https://learn.tradelabsai.com/orders/limit-orders/): A limit order trades only at your price or better. Learn how buy and sell limits work, why they may not fill, queue priority and how to set a smart limit price.
- Related: [Commissions and Fees](https://learn.tradelabsai.com/orders/commissions-and-fees/): Commissions, exchange, clearing and regulatory fees add up. Learn how commission structures work, the fees hidden in each trade and how to compare brokers.
- Related: [Perpetual Futures](https://learn.tradelabsai.com/crypto/perpetual-futures/): Perpetual futures are crypto derivatives with no expiry, kept close to spot by funding payments. Learn how perps work, leverage, margin, funding and the main risks.
- Related: [Liquidations in Crypto](https://learn.tradelabsai.com/crypto/liquidations-in-crypto/): A liquidation is the forced closing of a leveraged crypto position when margin runs out. Learn how liquidation prices work, cascades, heatmaps and how to avoid them.
- Related: [Bracket Orders](https://learn.tradelabsai.com/orders/bracket-orders/): A bracket order attaches a stop loss and a profit target to an entry, and cancels one when the other fills. Learn how to set one up, with a worked example.