Position (finance): Difference between revisions

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Markets

Assets
Asset (economics) Bond Asset growth Capital asset Commodity Derivatives Domains Equity Foreign exchange Money Over-the-counter Private equity Real estate Spot Stock
Participants
Angel investor Bull (stock market speculator) Financial planner Investor institutional Retail Speculator
Locations
Financial centres Offshore financial centres Conduit and sink OFCs

Corporate

General
Accounting Audit Capital budgeting Capital structure Corporate finance Credit rating agency Enterprise risk management Enterprise value Risk management Financial statements
Transactions
Leveraged buyout Mergers and acquisitions Structured finance Venture capital
Taxation
Base erosion and profit shifting (BEPS) Corporate tax haven Tax inversion Tax haven Transfer pricing

Public

Banking

Lists of banks

Position is the amount of cash, securities, commodities and to wider extent all financial instruments held and/or owned by a physical person or legal entity.

In financial trading, a position is a binding commitment to buy or sell a given amount of financial instruments, such as securities, currencies or commodities, for a given price.

Trading and financial assets

In derivatives trading or for financial instruments, the concept of a position is used extensively. 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.

Long position

When a trader buys an option contract that he is not short, he is said to be opening a long position.
When a trader sells an option contract that he is already long, 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

Short position

When a trader sells an option contract that he is not long, he is said to be opening a short position.
When a trader buys an option contract that he is already short, 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.

Net position

Net position is the difference between total open long (receivable) and open short (payable) positions in a given asset (security, foreign exchange currency, commodity, etc.) held by an individual. This also refers to 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.

References

v t e Financial markets
Types of markets	Primary market Secondary market Third market Fourth market
Types of stocks	Common stock Golden share Preferred stock Restricted stock Tracking stock
Share capital	Authorised capital Issued shares Shares outstanding Treasury stock
Participants	Broker Floor broker Inter-dealer broker Broker-dealer Market maker Trader Floor trader Proprietary trader Quantitative analyst Investor Hedger Speculator Arbitrager Scalper Regulator
Trading venues	Exchange List of stock exchanges Trading hours Over-the-counter (off-exchange) Alternative trading system (ATS) Multilateral trading facility (MTF) Electronic communication network (ECN) Direct market access (DMA) Straight-through processing (STP) Dark pool (private exchange) Crossing network Liquidity aggregator
Stock valuation	Alpha Arbitrage pricing theory (APT) Beta Buffett indicator (Cap-to-GDP) Book value (BV) Capital asset pricing model (CAPM) Capital market line (CML) Dividend discount model (DDM) Dividend yield Earnings yield EV/EBITDA Fed model Net asset value (NAV) Security characteristic line Security market line (SML) T-model
Trading theories and strategies	Algorithmic trading Buy and hold Contrarian investing Dollar cost averaging Efficient-market hypothesis (EMH) Fundamental analysis Growth stock Market timing Modern portfolio theory (MPT) Momentum investing Mosaic theory Pairs trade Post-modern portfolio theory (PMPT) Random walk hypothesis (RMH) Sector rotation Style investing Swing trading Technical analysis Trend following Value averaging Value investing
Related terms	Bid–ask spread Block trade Cross listing Dividend Dual-listed company DuPont analysis Efficient frontier Financial law Flight-to-quality Government bond Greenspan put Haircut Initial public offering (IPO) Long Mandatory offer Margin Market anomaly Market capitalization Market depth Market manipulation Market trend Mean reversion Momentum Open outcry Order book Position Public float Public offering Rally Returns-based style analysis Reverse stock split Share repurchase Short selling Short squeeze Slippage Speculation Squeeze-out Stock dilution Stock exchange Stock market index Stock split Stock swap Trade Tender offer Uptick rule Volatility Voting interest Yield

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 {{Other uses|Position (disambiguation)}}
+Position is the amount of cash, securities, commodities and to wider extent all financial instruments held and/or owned by a physical person or legal entity.
-In [[Trading (finance)|financial trading]], a '''position''' is a [[binding commitment]] to [[Trading (finance)|buy or sell]] a given amount of [[financial instrument]]s, such as securities, currencies or commodities, for a given price.
+In [[Trading (finance)|financial trading]], a '''position''' is a [[binding commitment]] to [[Trading (finance)|buy or sell]] a given amount of [[financial instrument]]s, such as securities, currencies or commodities, for a given price.
-The term "position" is also used in the context of [[finance]] for the amount of securities or commodities held by a person, firm, or institution, and for the ownership status of a person's or institution's investments.
 ==Trading and financial assets==