Closed Position

A closed position refers to a trade that has been fully exited—where the investor has sold a previously purchased security (closing a long position) or bought back a previously shorted security (closing a short position), completing the round-trip transaction. Once a position is closed, the realised profit or loss is locked in and no longer subject to market price movements. In derivatives, closing a position before expiry is known as squaring off. For tax purposes in India, the holding period and gain or loss of a position is determined from the date of opening to the date of closing, establishing whether the gain is short-term or long-term in nature.