An action taken to reduce or eliminate the risk involved in having an open position in a financial, commodity, or currency market.
A naked position, also known as an uncovered or open position, refers to the practice of entering into a derivatives contract—such as options or futures—without holding the underlying asset involved in the contract.
A trading position where a trader holds commodities, securities, or currencies that are bought but unsold or unhedged, exposing them to market fluctuations until the position is closed or hedged.
In financial trading, a square position refers to an open position that has been covered or hedged, neutralizing the trader’s exposure and risk associated with price movements.
