Selling and closing a position: What is the difference?
The term “selling a stock” sounds pretty straight forward. And it is. However, in the investment world it can have two different meanings. On the eToro platform, we use two distinct terms in order to prevent confusion.
Closing a trade
On the eToro platform, closing a trade or closing a position means that I am terminating an investment that I had previously made. For example, you had one share of EasyJet stock which is now trading at $832. If you choose to close your position this means that you are ending your investment in EasyJet stock and you will receive the $832 back to your account. When you close the position, you no longer own a share of EasyJet stock.
In the image below, you can see what the screen looks like when you are about to close a trade with EasyJet stock.
Closing a trade is not only related to investments in stocks. It is connected with all types of investments of financial assets on the eToro platform. Closing a trade is synonymous with the popular phraseology of selling a stock. However, selling a stock, or any other asset, has another meaning on the eToro platform, which we will now explain.
Selling an asset:
“Selling” a financial asset, sometimes referred to as is different from “closing an open trade”.
Let’s say, you want to purchase package of Any stock or other financial asset on the iToro platform. Then it will have an expiry that will be taken into consideration towards an early closure or cancelation of contract. So the tally of the profits will depends on early closure of the trade which may cancel the profits.
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