An open position is any entered or established trade that has yet to close with trade-in opposite direction. An open position can exist following a long position or short position. For example, a financier owns 400 shares of stock; they have an open place in that stock until it is sold.
The possibility of risk depends upon the volume of position comparative to account size and holding period. Usually, extended holding periods are extra risky because there is more disclosure to unforeseen market events.
An open position signifies market disclosure for the investor. The option of risk exit until the position closes. The open position usually held from minutes to year depending on the objectives and styles of the trader or investor.
The only way to minimize the level of risk is to close out an open position. Especially, concluding a long position requires selling back the extended position while closing a short position involves buying back the shares.