What Is A Long Position?

In typical stock investing the long position can be defined as investing with the intention of an increase in value of the stock or commodity being invested in.  The long position is the exact opposite of short selling, meaning making trades based on the interest that a stock or commodity will lose value.  “Going Long” as the long position is often referred to in investing circles, is the most standard type of investment for the average person.  It simply means you are buying stock or another commodity and betting it will increase in value in the coming weeks, months, even years or decades.  Going long is viewed as honest investing, putting your money in the stock market and making a profit when your given stock or commodity makes a profit.  The long position in regular corporate stock investing is why the markets even exist in the first place.  If never was willing an investor to hand over his money to a company and let them use it to try and be more profitable, the whole market could not function.  Going long is stock investing at its most basic, and probably its best.

Long Position: Currency Trading

In currency trading the term “long position” has another meaning.  Currencies are always traded in pairs, one currency for another.  For example if you possess US Dollars (USD) you would be looking to sell them for another currency, not the same.  If you sold them for Japanese Yen, the US Dollar and the Yen would be considered currency pairs.  The long position in currency trading is used to identify the base currency of a given pair.  In this example the US Dollars are being traded for Japanese Yen making the US Dollar the base of the pair, and therefore the holder of the long position.

Related posts:

1. Currency Pair Quotes
2. What Is Base Currency?
3. What Is A Short Position?
4. What Is An Open Position?
5. What Is A Position?