Although it sounds like it could be a job opening for a bar bouncer, an open security position simply refers to an investment made by a hedge fund. In general usage, it has no greater meaning than this. Security, in this case, does not refer to computer or physical security, nor does it refer to the investment itself. It is a security in the normal financial sense of an investment.
A hedge is usually defined as an investment designed to compensate for potential losses, or risk, from somewhere else. Over time, the hedge fund idea developed into an aggressive form of investment open to wealthy investors only, referred to as accredited investors. In theory, these funds exist to make money in the event that other assets owned by an individual or firm are exposed greatly to risk.
The term open means it is owned by a hedge fund. There is a sense that open might have the meaning of transparent. While far less common, recent scandals in the corporate world have forced certain hedge funds to open their books to investors in ways not considered before. An open position, in this definition is an investment owned by a hedge fund that is open to investors. It can be investigated for risk, fraud or any other problem that might underlie the asset or investment.
A security is any investment. Generally, any kind of derivative, such as an option, is also included. Bonds or stocks are considered securities. When dealing with hedge funds, it usually has nothing to do with being secure, or risk-free. It is simply a normal investment.
An open security position is an investment owned by a hedge fund for the purpose of making money. Hedge funds are known for being seeking very high returns and hence, very high risks. Speaking very generally, an OSP is often a longer term investment, usually more than a year. An OSP, in a sense, is a way that a hedge fund might stake out its tur” in the high-risk investment world.