{"id":14283,"date":"2026-05-27T07:40:38","date_gmt":"2026-05-27T07:40:38","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/closed-position\/"},"modified":"2026-05-27T07:40:38","modified_gmt":"2026-05-27T07:40:38","slug":"closed-position","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/closed-position\/","title":{"rendered":"Closed Position"},"content":{"rendered":"

A closed position<\/a> is a trade that has been fully exited, with all buying or selling completed. Once closed, the position no longer carries market risk, and the profit or loss is realised. Closing a position involves selling an asset you had bought (closing a long) or buying back an asset you had short-sold (closing a short).<\/p>\n

What Is a Closed Position?<\/h2>\n

A trade is “closed” when the offsetting transaction has been executed. The realised profit or loss is locked in at this point, regardless of where the price goes afterwards.<\/p>\n

– **Closing a long position**: you sell the shares<\/a> or contract you had bought
\n– **Closing a short position**: you buy back the shares or contract you had sold short<\/p>\n

Closed Position vs Open Position<\/a><\/h2>\n

| Feature | Open Position | Closed Position |
\n|———|————–|—————-|
\n| Trade status | Active | Completed |
\n| P&L | Unrealised | Realised |
\n| Market risk | Present | None |
\n| Margin required | Yes (for derivatives<\/a>) | No |<\/p>\n

How Positions Are Closed<\/h2>\n

**Intentional closure**: the trader manually exits the trade based on a target, stop-loss, or change in view.<\/p>\n

**Automatic closure**: stop-loss orders, target orders, or margin call<\/a>s result in automatic position closure.<\/p>\n

**Expiry**: futures and options<\/a> positions are automatically closed at expiry.<\/p>\n

**Settlement**: in some markets, positions are closed and cash-settled at the settlement price.<\/p>\n

Tax<\/a> Implications<\/h2>\n

When a position is closed, the gain or loss is realised and becomes taxable:
\n– Short-term capital gain<\/a>s (shares held under 1 year): 15%
\n– Long-term capital gains (shares held over 1 year): 10% above Rs 1 lakh per year
\n– Speculative income (intraday equity<\/a>, futures): taxed as business income at slab rate<\/p>\n

Practical Example<\/h2>\n

Neha bought 200 shares of HDFC Bank at Rs 1,600 per share (total cost: Rs 3.2 lakh). She sells all 200 shares at Rs 1,780 per share (Rs 3.56 lakh). This closes her position. Her realised profit is Rs 36,000. Since she held for 8 months (short-term), this is taxed at 15% = Rs 5,400.<\/p>\n

Key Takeaways<\/h2>\n

– A closed position is a fully exited trade where profit or loss is realised
\n– Closing a long means selling what you bought; closing a short means buying back what you sold
\n– Once closed, the position carries no market risk and requires no margin
\n– Taxes are triggered when a position is closed (realised gains\/losses)
\n– Stop-loss orders, target orders, and expiry are common automatic position closure mechanisms<\/p>\n","protected":false},"excerpt":{"rendered":"

A closed position is a trade that has been fully exited, with all buying or selling completed. Once closed, the position no longer carries market risk, and the profit or loss is realised. Closing a position involves selling an asset you had bought (closing a long) or buying back an asset you had short-sold (closing […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14283","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"A closed position is a trade that has been fully exited, with all buying or selling completed. Once closed, the position no longer carries market risk, and the profit or loss is realised. Closing a position involves selling an asset you had bought (closing a long) or buying back an asset you had short-sold (closing…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14283","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14283\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14283"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}