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In finance, a long position in a financial instrument means the holder of the position owns a positive amount of the instrument. The holder of the position has the expectation that the financial instrument will increase in value. [1] This is known as a bullish position. The term "long position" is often used in context of buying options ...
Going long vs. going short The distinction between going long and going short is brief but important: Being long a stock means that you own it and will profit if the stock rises.
A hedge fund might sell short one automobile industry stock, while buying another—for example, short $1 million of DaimlerChrysler, long $1 million of Ford.With this position, any event that causes all auto industry stocks to fall will cause a profit on the DaimlerChrysler position and a matching loss on the Ford position.
The buyer of a contract is said to be the long position holder and the selling party is said to be the short position holder. [1] As both parties risk their counter-party reneging if the price goes against them, the contract may involve both parties lodging as security a margin of the value of the contract with a mutually trusted third party.
A long position is what you take when you expect a security to rise in value. Someone who has taken a long position in a given security has purchased that security, or taken a long position with a ...
Each trade results in a "long" (buyer's position) and a "short" (seller's position). Futures and options contracts When trading futures contracts , being 'short' means having the legal obligation to deliver something at the expiration of the contract, although the holder of the short position may alternately buy back the contract prior to ...
In finance, a position is the amount of a particular security, commodity or currency held or owned by a person or entity. [1]In financial trading, a position in a futures contract does not reflect ownership but rather a binding commitment to buy or sell a given number of financial instruments, such as securities, currencies or commodities, for a given price.
That is, the long contract goes up more than the short contract does or it falls less than the short contract falls — creating a positive move overall for the trade.