Pros and Cons Of an Open Position
Pros Of an Open Position
An open position offers the opportunity for a trader to realize a profit. Without having an open position in a market, a trader would have no exposure and so couldn’t expect to receive any returns.
Leverage can be an excellent way for a trader to maximize profit on their open positions by gaining full market exposure for a small initial deposit. However, while trading on leverage can increase profits, it can also amplify losses.
Cons Of an Open Position
With financial exposure, comes the risk of losing money. As a result, a trader to needs create a risk management strategy. This could include learning about the risks of leveraged trading or how to hedge an open position.