Vacant Position Ratio

What Is the Open Position Ratio?

The vacant position ratio is calculated as the percentage of [open positions](/vacant position) held for every one of the major currency pairs on a given trading platform or exchange, relative to the total number of positions held for every one of the major pairs on that platform.

It is a neighborhood indicator of open interest in forex market trading settings and will fluctuate between and among the different forex platforms and exchanges.

Figuring out the Open Position Ratio

Vacant position ratios are utilized by foreign exchange traders to provide them with a feeling of which currencies investors are zeroing in on, by showing how one major currency pair compares to the others, refreshed several times every day. It is utilized related to trading volume activity for this purpose.

The vacant position ratio is a relative measure of open interest between various currencies and doesn't show the percentage of long or short positions relative to total positions for a major currency pair, for which there are individual long-short ratios.

As vacant position ratios will generally not entirely set in stone by the positions of the traders on a specific retail trading platform, it will just address a minuscule sample of what is happening in the a lot more extensive forex market, where large investment banks overwhelm the market. Spot trades just address a small percentage of foreign transactions, and retail trading platforms are just a small percentage of that. Assuming that vacant position ratios have any utilization, it is to show which retail trades have become crowded, and this could essentially reflect herd behavior.

Illustration of an Open Position Ratio

For instance, the currency pair of euros versus U.S. dollars (EUR/USD) may have a vacant position ratio of 25.8 on the speculative FutureForex platform. This just means that EUR/USD addresses 25.8% of all open positions at FutureForex around then.

The percentages of all vacant position ratios accessible will constantly include close to 100%. This is on the grounds that minor currency pairs are not frequently remembered for the computations which can make the total be short of what 100 percent. The major currency pairs will incorporate the four forex pairs which are viewed as the most vigorously traded in the FX market: EUR/USD; USD/JPY; [GBP/USD](/gbp-usd-english pound-us-dollar-currency-pair); and USD/CHF.

Features

• This ratio gives an overall impression of which currency pairs have the most open interest on a platform, and ought not be mistaken for a specific long-short ratio for a currency pair.
• The vacant position ratio is of limited use since it fluctuates from one platform to another, and is just indicative largely of retail spot activity.
• The vacant position ratio shows the extent of open currency positions held on a given forex trading platform.