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It's time to shed short positions: Art Cashin

Investors should consider closing any short positions ahead of the Labor Day holiday weekend, veteran trader Art Cashin told CNBC on Friday.

"If you're short, your potential loss can be infinite and so if prosperity or good news broke out over the weekend you might have something move far beyond what you were prepared for," Cashin said on "Squawk on the Street." "That is why the 70 percent bias to the upside before a three-day weekend."

Art Cashin
Adam Jeffery | CNBC
Art Cashin

Cashin, director of floor operations at the NYSE for UBS, spoke after the United Kingdom on Friday raised its terror threat to "severe."

Read MoreUKraises terror threat level: 'Attack highly likely'

Wall Street also tracked the situation between Russia and Ukraine, with fighting between separatists and government forces reportedly intensifying and NATO releasing satellite images of Russian troop movements in eastern Ukraine, a claim dismissed by Russia.

Still, though stocks fluctuated only slightly in midmorning trading, indicating investors were largely shrugging off mounting geopolitical tensions.

"They're having a little sigh of relief in the sense that no new shoe has dropped, and the 'invasion' appears to be limited to something under 1,000 people," Cashin said.

Read MoreRussia-Ukraine: Wall Street bets on limited impact

Given the myriad conflicts around the world, Cashin recommended investors keep tabs on current events over the weekend.

"We really want to watch the news tickers and unfortunately, the rumor mill."

By CNBC's Drew Sandholm. CNBC.com contributed to this report.

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