Long position definition
Long position
A long position is a trade that earns a profit if the underlying market moves up in price. You open a long position by buying a financial asset. If the asset then increases in value, you can sell it for a profit. If it falls in value, you may have to sell it for a loss.
Going short is the opposite of opening a long position. Here, you sell an asset to open your trade – then make a return if it falls in price.
Most investments are long positions. Traders who use derivatives, though, may go short just as often as they go long.
What happens when you go long on a stock?
When you go long on a stock, you are buying it in the hope that it increases in value. For example, you could invest in the shares of a company by buying them via a stockbroker and adding them to your portfolio. Or you could use CFDs to go long on stocks without investing in them.
If your chosen company’s share price goes up, then you can sell your shares or CFDs for a profit.