View source for Finance:Position

{{Short description|Amount of a certain security, commodity or currency held or owned by a person/entity}}
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In [[Finance:Finance|finance]], a '''position''' is the amount of a particular [[Finance:Security|security]], [[Finance:Commodity|commodity]] or [[Finance:Currency|currency]] held or owned by a person or entity.<ref>{{cite web |url= https://www.investopedia.com/terms/p/position.asp |title= Position |work= Investopedia |access-date= 2018-03-12}}</ref>

In financial trading, a position in a [[Finance:Futures contract|futures contract]] does not reflect ownership but rather a binding commitment to buy or sell a given number of [[Finance:Financial instrument|financial instrument]]s, such as securities, currencies or commodities, for a given price.<ref>{{cite web |url= https://www.nasdaq.com/investing/glossary/p/position |title= Position |work=Financial Glossary |publisher= Nasdaq |year=2011 |first= Campbell R. |last=Harvey |}}</ref>

==Trading and financial assets==
In [[Finance:Derivative|derivatives trading]] or for financial instruments, the concept of a ''position'' is used extensively.  There are two basic types of position: a ''[[Finance:Long|long]]'' (holding a positive amount of the instrument) and a ''[[Finance:Short|short]]'' (holding a negative amount of the instrument). Generally speaking, long positions stand to gain from a rise of the price of the instrument and short positions from a fall (but with [[Finance:Option|options]] the situation is more complicated).

Options will be used in the following explanations. The same principle applies for [[Finance:Futures contract|futures]] and other [[Finance:Security|securities]].  For simplicity, only one contract is being traded in these examples.

===Long position===
*When a trader ''buys'' an option contract that he is not short, he is said to be ''opening'' a [[Finance:Long|long]] position.
*When a trader ''sells'' an option contract that he is already long, he is said to be ''closing'' a long position.

===Short position===
*When a trader ''sells'' an option contract that he is not long, he is said to be ''opening'' a [[Finance:Short|short]] position.
*When a trader ''buys'' an option contract that he is already short, he is said to be ''closing'' a short position.

===Bull position===
A trader holding a bull position will benefit when the price of the underlying goes up. This is equivalent to holding a long position on most financial instruments, but also a short position on put options, inverse ETFs or similar.

===Bear position===
A trader holding a bear position will benefit when the price of the underlying goes down. This is equivalent to holding a short position on most financial instruments, but also a long position on put options, inverse ETFs or similar.

===Net position===
Net position is the difference between total open long (receivable) and open short (payable) positions in a given asset (security, foreign exchange [[Finance:Currency|currency]], [[Finance:Commodity|commodity]], etc.) held by an individual. This also refers to the amount of assets held by a person, firm, or [[Finance:Financial institution|financial institution]], as well as the ownership status of a person's or institution's investments.

==See also==
*[[Arbitrage]]

==References==
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[[Category:Derivatives (finance)]]
[[Category:Financial markets]]

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