Foreign exchange position is also called foreign exchange position, also called foreign exchange holdings. Foreign exchange position refers to the amount of foreign currency receipts and payments in bank accounts engaged in foreign exchange business. In foreign exchange business, it is used to express the surplus and deficit of various foreign currency trading amounts. Banks exchange foreign exchange according to different types and periods every day.

In the case of trading, the various foreign exchange amounts that can be received and paid on the same day are compiled into a foreign exchange position table to observe whether the income and expenditure are balanced. If the income exceeds the expenditure, it is a long position, and the expenditure exceeds the income, it is an empty position. Long positions are creditor's rights and short positions are debts. Both long positions and short positions are "open positions", also known as "guaranteed positions", which may suffer losses due to exchange rate fluctuations.

There are three forms of foreign exchange positions:

(1) An "oversold position" in which the total amount of foreign exchange sold exceeds the total amount of foreign exchange bought;

(2) The opposite of "overbought position";

(3) "Savar position" with roughly equal trading volume.

The first two will make foreign exchange banks suffer favorable or unfavorable effects due to exchange rate changes. In order to avoid the risk of exchange rate changes, foreign exchange banks must often conduct foreign exchange transactions with other foreign exchange banks, that is, buy when overbought and sell when overbought, so as to make foreign exchange holdings as stable as possible.