Position

You can take one of two positions when trading assets. If you think an asset’s value will go up, you’ll take a long position. If you think an asset’s value will go down, you’ll take a short position.

Where have you heard about positions?

You may have heard in the news of traders 'shorting' a stock, a strategy that means taking a short position in the hope the stock falls in value.

What you need to know about positions.

If you decide to ‘go long’, you’ll buy stocks or other assets that you believe will go up in value. If you’re right, you’ll make a profit by selling them for a higher price than you paid.

‘Going short’ means borrowing shares from a broker and selling them in the open market. Once the shares’ value falls to a certain level, you’ll buy the shares back and return them to the broker.

For investors going long, the main risk is that the value of the asset they own falls, resulting in a loss. The main threat for those going short is a rise in the value of the shares they’ve borrowed.