What Is a Position?
A position is the amount of a security, asset, or property that is owned (or sold short) by some individual or other entity. A trader or investor takes a position when they make a purchase through a buy order, signaling bullish intent; or if they sell short securities, with bearish intent.
Opening a new position is ultimately followed at some point in the future by exiting or closing the position.
Understanding Positions
Positions come in two main types.
- Long positions are most common and involve owning a security or contract. Long positions gain when there is an increase in price and lose when there is a decrease.
- Short positions, in contrast, profit when the underlying security falls in price. A short often involves securities that are ==borrowed and then sold, to be bought back hopefully at a lower price.