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In finance, a position may be:

• A commitment to buy or sell a given amount of securities or commodities;
• The amount of securities or commodities held by a person, firm, or institution; or
• The ownership status of a person's or institution's investments.

Contents 1 Trading and financial assets 1.1 Long position 1.2 Short position 1.3 Net position 2 See also

[edit] Trading and financial assets

In derivatives trading or for financial instruments, the concept of a position is used heavily. There are two basic types of position: a long and a short.

Traded options will be used in the following explanations. The same principle applies for futures and other securities. For simplicity, only one contract is being traded in these examples.

[edit] Long position

• When a trader buys an option contract that he has not already written (i.e. sold), he is said to be opening a long position.
• When a trader sells an option contract that he already owns, he is said to be closing a long position.
• When a trader is 'long', he/she wins when the price increases, and loses when the price decreases.

[edit] Short position

• When a trader writes (i.e. sells) an option contract that he does not already own, he is said to be opening a short position.
• When a trader buys an option contract that he has written (i.e. sold), he is said to be closing a short position.
• When a trader is 'short', he/she wins when the price decreases, and loses when the price increases.

The long and the short of it is that: buyers are referred to as the long; and sellers are referred to as the short.

[edit] Net position

Net position is the difference between total open long (receivable) and open short (payable) positions in a given assets (security, foreign exchange currency, commodity, etc...) held by an individual. In finance position is a commitment ^{[disambiguation needed]} to buy or sell securities, currencies or commodities. This also refers the amount of assets held by a person, firm, or financial institution as well as the ownership status of a person's or institution's investments.

[edit] See also

• Long (finance)
• Short (finance)