Recently, many beginners have found that the biggest confusion after entering the crypto space is being overwhelmed by various trading terminologies. The concepts of opening a position, closing a position, and holding a position are especially easy to confuse. Instead of memorizing them by rote, it's better to understand the actual meaning of each operation so that you can truly get started with contract trading.

First, let's talk about opening a position. Simply put, it means establishing a new trading position in the market. When you are bullish on a certain coin and believe the price will rise, you can buy to open a long position; conversely, if you are bearish, you can sell to open a short position. Opening a position requires paying a margin, which ensures you have enough funds to cover potential losses. The cost of opening a position is straightforward to calculate: it’s the trading price multiplied by the trading quantity.

Next is closing a position. This term actually means closing the position you have already opened. When the price reaches your target level, or if the market moves against your expectations, you can choose to close the position to lock in profits or cut losses. If you are long, you sell to close; if you are short, you buy to close. The profit and loss calculation for closing a position is also simple: for longs, it’s the current price minus the opening price, multiplied by the trading quantity; for shorts, it’s the opening price minus the current price.

Holding a position means the position you are currently maintaining. After opening a position, until you close it, you are holding that position. During the holding period, your profit or loss will fluctuate with the market price in real time. The calculation method is the same as for closing a position.

Once you understand these three concepts—the meaning of closing a position and how it works—you will have a clearer idea of what you are doing in contract trading. The key is to grasp the timing of opening and closing positions based on market conditions and your risk tolerance, while also managing risks properly. Only then can you survive long-term in the crypto space.