Force open definition

What is force open?

Force open is a function on IG Bank's trading platform which enables you to open a position in the opposite direction to an existing one on the same market. The result would be a long and short position on the same asset.

A force open should not be confused with a forced close, which occurs when a position is closed automatically without any action by you.

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Force open vs net off

Force open enables you to maintain your exposure to a market while opening a new position in the same market, which can be a useful tool for hedging.

Without the force open function, most platforms will net off your positions. In a netted off trade, an existing position would be automatically closed if the new position would cancel it out (unless you attach a stop or a limit, in which case it will keep both positions open).

Placing two trades of the same value using the force open function will create a net exposure of zero – the same as having no open positions. However, you would still pay any applicable overnight funding or spread, which is something to be aware of when using the force open feature.

Examples of force open

Let’s say that you have a short position on 100 shares of company X, but you believe that the stock is going to see a short-term rise in price. In such an instance, you might decide to open a buy position on 100 shares of company X to minimise your losses.

Normally, IG Bank would net off the two positions which means that the first would be closed (unless you have a stop or limit attached), but you decide to check the force open box. This means that both orders would be executed.

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