Nyíltvég

Nyíltvég is a Hungarian term that translates to "open end" or "open loop" and is most commonly used in the context of financial derivatives, particularly options. In finance, a nyíltvég position refers to a situation where an investor has sold an option contract but has not yet bought back or closed out that position. This means the seller is still exposed to the risk of the option being exercised against them. For example, if someone sells a call option, they have a nyíltvég position as long as they haven't repurchased that same call option.

The risk associated with a nyíltvég position is that the buyer of the option may decide to exercise it, forcing the seller to fulfill their obligation. If the market moves unfavorably for the seller, they could incur significant losses. To mitigate this risk, sellers often seek to close out their nyíltvég positions before expiration by buying back the option or by hedging their exposure through other trades. The term is primarily used in the Hungarian financial markets and among Hungarian-speaking traders.