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Position

• A market commitment; the number of contracts bought or sold for which no offsetting transaction has been entered into. The buyer of a commodity is said to have a long position and the seller of a commodity is said to have a short position. Related: open contracts

• (1) To go long or short in a security. (2) The amount of securities owned (long position) or owed (short position).

• The amount of a security either owned (a Long position) or owed (a Short position) by an individual or by a dealer. Dealers take long positions in specific securities to maintain inventories and thereby facilitate trading.

 
 Embedded terms in definition
 Commitment
Commodity
Contract
Dealer
Go
Inventories
Long position
Long
Market
Open contracts
Securities
Security
Short position
Short
Take
Trading
 
 Referenced Terms
 Actual hedging: Is the risk management of a Position when a hedger has a bona fide long or short actual position and is involved in an offsetting transaction. This offset is usually in the derivatives market.

 Against actuals: Is a commodity market transaction whereby futures are exchanged or transferred against a cash Position.

 Anticipatory hedging: Refers to the placement of a hedge prior to placement of the actual Position. Sometimes, this occurs when a firm knows that it will receive investment funds later that day or week and prefers to hedge numerous potential risks at the earlier date. Similarly, a commodity producer may prefer to hedge prior to the harvest of a crop, production of an energy product or processing a raw material into a deliverable lot.

 Assignment: The receipt of an exercise notice by an options writer that requires the writer to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.Is the action for the seller of the option of acquiring the opposite Position when an option is exercised. When a put is exercised, the writer receives a long position in securities or a long futures contract. When a call is exercised, the writer receives a short position in the securities or a short futures contract.A voluntary liquidation procedure by which a firm's creditors pass the power to liquidate the firm's assets to an adjustment bureau, a trade association, or a third party, which is designated the assignee.

 Automatic exercise: Occurs after an option expires. Each exchange and its clearing house has rules which govern this exercise. There are minimum in-the-money requirements. A holder of an option must inform the clearing house not to automatically exercise an option. These instructions not to exercise may be due to relatively high transaction costs, increases in Position limits, or unacceptable alterations in position profiles. Also, after hours trading indications may suggest dramatically different prices than those used to determine the automatic exercise in-the-money amounts.

 
 Related Terms
 Changes in financial position
Clear a position
Long position
Naked option position
Naked position
Net position
Open position
Position diagram
Reporting level or reporting position level
Short position
Take a position

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