What is a Closed Position?

Closed Position Definition. A Closed Position in a currency is one where any risk exposure in the foreign currency has been eliminated. The process to close a position is to sell or buy a specific amount of currency to offset an equal amount of currency in the respective open position. This action will “square”, “offset” or “even up” the position. Closing a long position in a currency requires selling, and closing a short position in a currency requires buying.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.