Open position

A live exposure. It carries an instrument, a direction, a size, the price and time it was opened, and a running unrealised figure that is recalculated on every tick. Nothing about it is settled: the unrealised figure is what the position would produce if it were closed at the current price, and it becomes real only when the position is closed.

Two things are held for as long as it stays open. A percentage of the position's notional value is held as used margin and is unavailable for anything else, and financing is applied for each night the position survives the daily cut off. Because profit and loss are calculated on the full contract value while only a percentage of that value has been posted as collateral, a loss is measured against the whole contract, can exhaust the collateral entirely, and is not limited to the amount deposited. A favourable move is measured on exactly the same basis and to exactly the same degree.

The detail that surprises people is the valuation. A position is valued at the price it could be closed at, which is the opposite side of the quote from the one it was opened on: a long opens at the offer and is marked against the bid. It therefore shows a small negative figure the instant it exists, and that figure is the spread already paid rather than a movement in the market. The second is that an unrealised figure is not a balance. It moves the account's equity, and therefore the margin calculation, without moving the balance at all, which is why the two numbers on a platform's account line differ while anything is open.