What is an open position?
An open position is a trade you have entered that has not yet been closed, so its profit or loss is still changing with the market price.
People also call it an "open trade". A buy position is a long position. A sell position is a short position. The position stays open until you close it, or until a stop loss, take profit or stop-out closes it for you.
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Worked example (hypothetical)
A trader buys XAUUSD (gold against the US dollar) as a CFD, a contract for difference that tracks the price without delivery of metal.
- On entry: the trade is filled. From this moment it is an open position. Part of the account balance is set aside as margin, a deposit that keeps the trade open.
- While open: gold rises above the entry price. The platform shows a floating (unrealised) profit. If gold falls below the entry price, it shows a floating loss instead. The account's equity moves with every tick.
- Overnight: if the trade is held past the daily rollover, a swap (overnight charge or credit) is applied. See swap fees.
- On close: the trader sells the same volume. The floating result becomes realised profit or loss and is added to or taken from the balance. The position no longer exists.
To put real figures on margin, pip value and profit for a given size, use the trading calculators.
Leveraged CFD and forex positions can lose money fast. A floating loss can grow beyond what you expected, especially over news events or weekend gaps.
Where the term appears
- MetaTrader 4 and MetaTrader 5: the Trade tab in the Toolbox lists open positions with symbol, type, volume, open price, current price, stop loss, take profit, swap and floating profit. See MetaTrader 5.
- Account statements: a statement usually separates closed trades from open positions and pending orders. See account statement.
- News and market reports: phrases like "traders added to long positions" or "net short positioning" describe the open positions held by groups of market participants. This differs from open interest, which counts outstanding futures or options contracts on an exchange.
Formal definition and edge cases
Formally, an open position is an exposure to an instrument created by an executed order and not yet offset by an opposite transaction of equal volume. See exposure.
Points experienced traders should keep straight:
- Pending orders are not positions. A buy limit or sell stop becomes a position only when it is filled.
- Partial close: closing part of the volume leaves a smaller open position. See fill and partial fill.
- Netting vs hedging: in MT5 netting mode, all trades in a symbol merge into a single net position. In hedging mode, buy and sell positions in the same symbol can be open side by side, each with its own ticket.
- Margin and stop-out: open positions tie up margin. If equity falls too far relative to used margin, the platform can close positions automatically.
- Size: the exposure of a position depends on volume in lots and the contract size.
Related terms
Frequent questions
What does open position mean in simple words?
It means a trade you are still in. Its result is not final until the trade is closed.
Is an open trade the same as an open order?
No. An order is an instruction. It becomes an open position only after it is executed.
Does an open position cost anything while it is held?
CFD positions held past the daily rollover usually carry a swap. Spread and any commission apply on entry or exit, depending on the account.
Is floating profit real money?
Not until the position is closed. Until then it can shrink or turn into a loss.
Can a position close without me doing anything?
Yes. A stop loss, take profit or stop-out can close it automatically.