What does "Close Only" mean in stock trading?

The current crisis has become an excellent opportunity for many traders to showcase their skills and earn some good money.

However, things don't always go according to plan. Often, you'll find emails from your broker informing you that trading for a certain asset has been switched to "Close Only

" mode. Close Only means you can no longer open new trades for that asset.

For example, due to increased volatility and widening spreads, trading for XAU has been switched to Close Only mode.

After receiving this message, you can't open a new gold trade, only close existing ones. Surprisingly, this isn't such a bad option compared to trading being completely halted.

In this way, the broker protects its clients from paying excessive commissions when opening new trades. The widening of spreads is initiated by liquidity providers—banks and other financial institutions.

What to do with already open trades?

Everything depends on the market situation itself. If it's favorable for you, you can hold off on closing them. However, if the trend is going against your positions, it's better not to delay and close your existing XAU orders.

Because the next step after Close Only may be a halt to trading, and the losing order will be closed at the first quote after the market opens. In such a situation, even set stop loss.

It should be noted that switching trading to this mode only applies to a specific asset, in our example this is XAU; trading for all other assets can be conducted in the normal mode.

You will find out that trading is allowed when you receive a message with the words “Full Trade”.