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.