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.

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