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Open Position

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Any stock or equity which is owned is said to be an open position. An active trader may have several open positions at any given time. An open position may be a long position or a short sale. An open position will fluctuate freely in value as market conditions change -- that is, as the price of the underlying equity of an open position rises and falls. Generally speaking, a long-term investor routinely holds one or more open positions for days or even years at a time, while a day trader may wish to close, or off-set, any open positions before or at the close of trading each day. Day traders often see a danger in holding an open position overnight, while a long-term investor is not as fearful of short-term market fluctuations which affect the day-to-day price of an open position. An open position becomes a closed position when the stock is sold or the open position is off-set (as in the case of a short sale).



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