Closing one position by opening a new transaction to offset it.
Liquidation
Related Terms
-
The Commitment of Traders (COT) report is a weekly publication that shows the aggregate holdings of different participants in the U.S. futures market. Each Friday, the CFTC (US Commodity Futures...
-
Delta hedging is a risk management strategy used in options trading to reduce or eliminate the directional risk associated with price movements in the underlying asset
-
The forex spot rate (or FX spot rate) is the amount it costs in one currency to buy another currency for immediate delivery. There isn’t a single “spot” rate. When opening a trade, FX traders are...
-
Position sizing refers to the process of determining the number of units to trade, based on your risk tolerance and the size of your trading account.
-
A stop order is an order placed to either buy above the market or sell below the market at a certain price. It is an instruction to your broker to execute a trade at a particular level that is less favorable than the current market price. In the image above, the blue dot is the current price. Notice how the green line is […]