Here's the gist of it: If a chord is played with all its tones as close together as they can be, then it's in "close position." If the notes are spread out then it's in "open position." An open position chord has some "air" between one or more of its tones.
Do open chords sound better?
On the other hand, an open E or open A sounds better than the barre versions. It really depends on context. For example, I prefer the sound of G7 in the third position rather than as an open chord. On the other hand, an open E or open A sounds better than the barre versions.
What are closed guitar chords?
What is a Closed Chord? Closed guitar chords are those where the root and the inverted positions, fit within the space of one octave. You have to practice and master these twelve positions in twelve keys. You also have to be able to name each chord that you play.
What is an open guitar chord?
Open chords, or open position chords, are guitar chords that include at least one unfretted open string. Open chords are also called “cowboy chords” because they're among the simplest chords to play, making them easy to learn for beginners.