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Published On: Wed, Feb 6th, 2013

Flat

A trader refers to his trade as Flat when he has held the position for a length of time yet has chosen to close it out due to non-profit.

While the trade has essentially not been closed out at a loss, it has sat on his books without producing a gain large enough to justify the holding period.  While a Flat trade has no loss, the trader has still committed capital to the trade and therefore a certain risk has been taken.  Since trading is measured risk taking, a Flat trade is often considered to be a Flat on a Failure trade, because successful traders expect a certain percentage unit of return for each unit of risk in a trade.  The Flat trade is essentially a failure because capital was at risk without adequate return.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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