I suggest playing in open position unless the situation demands otherwise when sight reading on the spot.

When you have a piece you want to memorize, picture the piece in your head, slowly try to play through it, and think "Would this note better be playing in another place?". Think chord shapes and positions for most non-contrapuntal music. For point/counterpoint, it's a bit tougher, but it's generally less notes than chordal music, so it's easier to find the optimal position.