Long position

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A party which buys a traded asset, has a long position in the asset. So they are long of it - for example in the case of a commodity, they would have a lot of it in storage once they had taken delivery of it.

Another example of a long position is the forward purchase of an asset. In this case the long position holder has a future entitlement to receive the asset, under the terms of the forward purchase contract.

Examples of traded assets include commodities, options, and underlying assets related to options (such underlying assets also being known as 'the physical').

See also