Square Position

DEFINITION of 'Square Position'

A term used in foreign-exchange trading. The term "square position" denotes that the positions of the currency dealer are offsetting – the buy positions of the dealer are equal to the sell positions.

BREAKING DOWN 'Square Position'

When a dealer is in a square position, the positions are perfectly hedged. If the dealer is not in a square position, then he or she is taking either a long or a short position. A square position is in the middle, neither net long nor net short.

RELATED TERMS
  1. Dealer Incentive

    A corporate sales strategy in which the price a dealer has to ...
  2. Purchase and Resale Agreements ...

    An arrangement between the Bank of Canada and dealers whereby ...
  3. Markup

    The difference between an investment's lowest current offering ...
  4. Privilege Dealer

    An individual or a securities firm that is registered as a market ...
  5. Dealer Market

    A financial market mechanism wherein multiple dealers post prices ...
  6. Dealer

    A person or firm in the business of buying and selling securities ...
Related Articles
  1. Investing Basics

    What's a Dealer Market?

    In a dealer market, market participants buy and sell through dealers who are designated as market makers.
  2. Professionals

    MUNICIPAL BOND TRADING

    Municipal Bond Trading Municipal bonds trade over the counter in the secondary market much like OTC stocks. Municipal bond dealers provide quotes on the bonds that they deal in, to other broker ...
  3. Charts & Patterns

    Understand How Square Works before the IPO

    Square is reported to have filed for an IPO. For interested investors wondering how the company makes money, Investopedia takes a look at its business.
  4. Professionals

    D. Accrued Interest

    Accrued Interest Most bonds pay interest semi-annually, based on their maturity date. An investor who wishes to sell a bond between the interest payment dates will be owed the interest that has ...
  5. Professionals

    Gift Rule

    Broker dealers may not pay compensation to employees of other broker dealers. If a broker dealer wants to give a gift to an employee of another broker dealer, it must: Be valued at less than ...
  6. Professionals

    C. Rule 200 Definitions and Order Marking

    Rule 200 updates the definition of who is determined to be long a security. As new derivatives and trading systems and strategies have been introduced, amendments to the short sale rules under ...
  7. Professionals

    End Users and Dealers

    CFA Level 1 - End Users and Dealers. Learn how end users and dealers interact in the forwards market. Provides examples showcasing the role of both in a financial transaction.
  8. Professionals

    Registration and Regulation of Brokers and Dealers

    FINRA/NASAA Series 26 Section 7 - Registration and Regulation of Brokers and Dealers. In this section manipulative, deceptive or fraudulent devices, discretionary accounts, fraudulent acts and ...
  9. Professionals

    Transactions

    Riskless Principal Transactions If a brokerage firm receives a customer order to buy or sell a security and the firm does not have an inventory position in the security, the firm may still elect ...
  10. Professionals

    Spread Calculations

    CFA Level 1 - Spread Calculations. Learn how to calculate the bid-ask spread in a foreign currency quote. Reveals the factors influencing the size of bid-ask spreads
RELATED FAQS
  1. What's the difference between a long and short position in the market?

    Understand long and short positions for stocks and option contracts; combine long and short positions for added leverage ... Read Answer >>
  2. How do I close a long position in forex?

    Learn the different ways that traders close out existing long positions in the forex market, depending on whether their brokers ... Read Answer >>
  3. How does the International Chamber of Commerce define the term 'Free on Board' (FOB)?

    Find out more about the International Chamber of Commerce, Incoterms rules and how the International Chamber of Commerce ... Read Answer >>
  4. What is the difference between a repurchase agreement and reverse repurchase agreement?

    Learn how a repurchase agreement is a form of collateralized lending and a reverse repurchase agreement is a form of collateralized ... Read Answer >>
  5. How long can you short sell for?

    When an investor or trader enters a short position, he or she does so with the intention of profiting from falling prices. ... Read Answer >>
  6. When short selling, how long should you hold on to a short?

    Explore the reasons for short selling and the various factors that influence how long an investor may wish to maintain a ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center