Position definition

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A position is the financial term for a trade that is either currently able to incur a profit or a loss (an open position) or has recently been cancelled (a closed position). Positions are the way in which a trader will hope to make a profit.

Positions come in two main varieties:

  • Long positions, that aim to make a profit when an asset’s price increases
  • Short positions, that aim to make a profit when an asset’s price decreases

Profit or loss on a position is only realised when the position is closed.

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