Yeah, I was wrong. After doing a little bit of searching I have found that an open circuit is one where current can't flow and a closed is where current can flow. Check here
and read the instruction manual, it explains the concept, although I have to admit I still don't really understand.
Hopefully someone else who knows will step in here and explain.
I use my circuit tracer all the time and it works great (Amprobe, not sure what model) but I couldn't tell you if it works on open, closed, or both. I would assume both because it has never failed me yet and I use it on all types of circuits, but I don't know for sure.