Long Position (redirected from Long (finance))

Long position

Owning or holding options (i.e., the number of contracts bought exceeds the number of contracts sold). For equities, a long position occurs when an individual owns securities. An owner of 1,000 shares of stock is said to be "Long the stock." Related: Short position.

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long position

The net ownership position in a particular security. If an investor owns 500 shares of Wal-Mart common stock, that person is said to be long 500 shares of Wal-Mart. Likewise, the more unusual situation of owning 1,000 shares of a particular stock at a time when 300 shares of the same stock have been sold short produces a long position of 700 shares. Being long indicates an expectation of rising share prices. Also called long. Compare short position.

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Long Position

The ownership of a security or derivative, or the state of having bought one or the other. A long position brings with it the right to coupon payments or dividends attached to the security or derivative. Informally, one who owns 100 shares of a stock is said to be "long 100 of the stock." Likewise, an investor who has bought (or holds) an option is said to be "long the option" because he/she has the right to exercise the option at a later date. See also: Short position, Close a position.

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Long position. Having a long position in a stock means you own the security.

You have the right to collect the dividends or interest the security pays, the right to sell it or give it away when you wish, and the right to keep any profits if you do sell.

Similarly, you have a long position in an option when you hold the option, and you have the right to exercise it before expiration or sell it.

The term is also used to describe a position that's maintained by your brokerage firm or bank on your behalf. For example, if your firm holds stocks for you in street name, you are said to be long on their books.

Having a long position is the opposite of having a short position in a security. A short position means you have borrowed shares through your broker, sold them, and must return them, plus interest, at some point in the future.

Similarly, a short position in an option means that you have sold the option, giving the holder the right to exercise and committing yourself to fulfilling the terms should exercise occur and you're assigned to meet them.

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Long (or Long Position)

What Does Long (or Long Position) Mean?

(1) The buying of a security such as a stock, commodity, or currency, with the expectation that the asset will rise in value. (2) In the context of options, the buying of an options contract. The term “long” is the opposite of “short” (or short position).

Investopedia explains Long (or Long Position)

(1) As an example, if an investor owns shares in McDonald's Corp., that investor is said to be “long McDonald's” or “have a long position in McDonald's.” (2) For options, buying a call (or put) options contract from an options writer gives the investor the right, not the obligation, to buy (or sell) a specific commodity or asset for a specified amount at a specified date. Buying the contract makes the investor “long” the contract.

Related Terms:
• Call Option
• Commodity
• Futures
• Put Option
• Short (or Short Position)