1. Open a position immediately. There are usually two modes of operation in trading, one is to go long (buyer) when the market is bullish, and the other is to go short (seller) when the market is bearish. Whether it is long or short, placing an order is called "opening a position". It can also be understood that in trading, whether it is buying or selling, any new position is called opening a position.

2. Before physical delivery or cash delivery expires, investors can voluntarily decide to buy or sell futures contracts based on market conditions and personal wishes.

If an investor (long or short) does not perform a reverse operation (sell or buy) with equal delivery month and quantity, and holds a futures contract, it is called a "position". In commodity futures operations such as gold, whether buying or selling, any new position is called opening a position. After the operator opens a position, he holds the position in his hand, which is called a position.

3. Position closing is a collective term for the behavior of long sellers selling the purchased stocks or short sellers buying back the sold stocks in stock transactions. The purpose of selling a stock long and buying a stock short is to earn profit from the price difference. Closing the position promptly when the market is favorable is crucial to realizing profit from the price difference or avoiding losses when the market reverses.

Liquidation is a term derived from commodity futures trading, which refers to the transaction behavior of one party to the futures purchase or sale to offset the futures contracts previously purchased or sold.

Extended information:

Opening, holding, and closing positions are all terms in futures trading. The characteristics of futures trading are:

1. Contract standardization< /p>

Futures trading is conducted by buying and selling futures contracts, which are standardized. Standardization of futures contracts means that, except for prices, all terms of futures contracts are pre-specified by the futures exchange and are standardized. The standardization of futures contracts brings great convenience to futures trading. Both parties to the transaction do not need to negotiate the specific terms of the transaction, saving transaction time and reducing transaction disputes.

2. Centralization of trading

Futures trading must be conducted within a futures exchange. Futures exchanges implement a membership system, and only members can enter the market for trading. If those customers who are outside the market want to participate in futures trading, they can only entrust a futures brokerage company to act as their agent. Therefore, the futures market is a highly organized market and implements a strict management system. Futures trading is ultimately completed centrally in the futures exchange.

3. Two-way trading and hedging mechanism

Two-way trading means that futures traders can either buy futures contracts as the beginning of futures trading (called buying and opening a position), or they can Selling a futures contract as the beginning of a transaction (called selling a position) is commonly known as "buying short and selling short."

Also linked to the characteristics of two-way trading is the hedging mechanism. In futures trading, most transactions do not fulfill the contract through physical delivery when the contract expires, but through the transaction when opening a position. Transactions in the opposite direction to relieve performance obligations.

To be specific, after a long position is established, the performance obligation can be released by selling the same contract. After a short position is established, the performance obligation can be released by buying the same contract.

The characteristics of two-way trading and hedging mechanism of futures trading have attracted a large number of futures speculators to participate in the transaction, because in the futures market, speculators have double profit opportunities. When futures prices rise, they can buy low. You can make profits by selling high, and when prices fall, you can make profits by selling high and buying low, and speculators can avoid the trouble of physical delivery through the hedging mechanism. The participation of speculators has greatly increased the liquidity of the futures market.

4. Leverage mechanism

Futures trading implements a margin system, which means that traders only need to pay a small amount of margin when conducting futures transactions, generally 5% of the contract value- With only 10%, contract transactions can be completed several times or even dozens of times. This feature of futures trading has attracted a large number of speculators to participate in futures trading.

Futures trading has the characteristic that a large amount of investment can be made with a small amount of funds, which is vividly called the "leverage mechanism". The leverage mechanism of futures trading makes futures trading characterized by high returns and high risks.

5. Daily debt-free settlement system

The daily debt-free settlement system, also known as the daily mark-to-market system, means that after the end of daily trading, the exchange The settlement price settles the profits and losses of all contracts, transaction margins, handling fees, taxes and other expenses. The net amount of the receivables and payables is transferred in one go, and the member's settlement reserve is increased or decreased accordingly. Brokerage members are responsible for settling clients in the same manner.

Baidu Encyclopedia - Opening a Position

Baidu Encyclopedia - Holding a Position

Baidu Encyclopedia - Closing a Position