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Trading Glossary

Position

Basics

What it means

An open trade you currently hold. A long position means you own the asset; a short position means you owe it. Closing the position ends the trade.

Example

If you buy 200 shares of MSFT and have not sold them, you hold an open long position of 200 shares. Selling all 200 closes the position to zero.

Mistake beginners make

Beginners open too many positions at once and lose track of total exposure. Five "small" long positions in tech stocks are really one giant bet on tech.

Related terms

  • Long — Buying an asset so you profit if its price goes up. You own it and want to sell it later a…
  • Short — Betting that an asset will fall in price. You borrow the asset, sell it now, and aim to bu…
  • Order — An instruction you send to your broker to buy or sell an asset. The order specifies what t…

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