Open Position

Definition ∞ An open position in financial markets, including digital asset trading, refers to a trade that has been executed but not yet closed or settled. This means an investor holds an active buy or sell order that is subject to market price fluctuations. The position remains open until an offsetting trade is made, realizing either a profit or a loss. It represents an active commitment to a particular market direction, carrying ongoing risk and reward potential.
Context ∞ Crypto news frequently discusses open positions, particularly in reports on derivatives markets like futures and perpetual swaps. An increase or decrease in open interest can signal shifts in market sentiment and potential volatility. A key discussion involves the use of leverage in open positions and its implications for market stability, especially during periods of rapid price change. Monitoring open positions helps assess market liquidity and speculative activity.