How it works
The trader specifies a quantity less than the full position size and submits a market or limit order to close that quantity in the opposite direction. The broker reduces position size proportionally; remaining quantity, average entry price, and unrealised P&L update accordingly. Stop-loss and take-profit orders attached to the position should automatically resize down (verify on your platform; some require manual adjustment). Partial closes apply to all instruments that support continuous sizing: stocks, ETFs, futures (down to 1 contract), CFDs, FX (down to micro lots).
Example
A trader holds 1,000 shares of XYZ bought at $50. XYZ rallies to $60: a $10,000 unrealised gain. The trader partial-closes 400 shares at $60 (realising $4,000 profit), leaving 600 shares running. If XYZ continues to $70, the remaining 600 shares add $6,000, total gain $10,000. If XYZ falls back to $55, the remaining 600 shares are up only $3,000 (down from $6,000), but combined with the realised $4,000 the total locked profit is $7,000. The partial close turned a binary all-or-nothing outcome into a smoother return profile.
Why it matters
Partial closes are the practical tool for scaling out of winners. The most common application: take half off at 1R (one unit of initial risk) profit, move stop on the remaining half to break-even, let the rest run. This guarantees the trade is non-losing regardless of outcome and converts most trades into either break-even or 2R+ winners. Partial closes also enable more nuanced position management around news events: reduce exposure before the catalyst, full close or full re-add after the move resolves.
