Long definition

What is a long position?

A long position describes the process of buying an asset with the expectation that the price of the underlying will rise. It is also known as ‘going long’ or ‘taking a long position’, and long positions are often opened by bullish traders with an optimistic market outlook.

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How to take a long position

If you’re looking to go long, you would open your trade at the offer (buy) price. A long position can either be opened by investing directly in the underlying asset, or by using financial derivatives such as CFDs.

When investing in an asset directly, you will take ownership of it. As a result, you need the price to rise in order to realise a profit.

CFDs are different because you never take direct ownership of the underlying asset, meaning they can be used to go both long and short. With a long CFD trade, you would expect the price of an asset to rise and the extent to which your prediction is correct will determine your profit or loss.

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Long vs short positions

A short position is the opposite to a long position. You’d go short if you believe that the price of the underlying asset will decrease.

When you open a short position with CFDs, you are effectively speculating that the market will fall in price. The extent to which the market agrees with your prediction determines your profit or loss.

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