Position meaning
A position is your open exposure to an instrument: an amount you have bought or sold that is not yet closed, so its value changes as the price moves.
There are two directions:
- Long position. You bought, and the position gains if the price rises and loses if it falls.
- Short position. You sold first, and the position gains if the price falls and loses if it rises.
When you have no open position in an instrument, you are flat.
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Worked example (hypothetical)
You open a long position on EUR/USD in a CFD account. The size is set in lots, and the contract size decides how much of the base currency each lot represents.
- If EUR/USD rises, the floating profit on the position grows.
- If EUR/USD falls, the floating loss grows. With leverage, a small move can take a large share of your balance.
- While the position stays open past the daily rollover, a swap may be charged or credited.
- Closing it is a sell of the same volume. Only then does the floating result become realised profit or loss.
To see the figures for a given lot size, pip value and margin, use the tools on the Calculators page.
Leveraged forex and CFD positions can lose money quickly, and losses can exceed what you planned to risk. See Risk management.
Where you see the term
- MetaTrader 4 and MetaTrader 5. The Trade tab lists open positions with the symbol, type (buy or sell), volume, open price, stop loss, take profit, current price, swap and floating profit. Closed positions move to the History tab. See Platforms and apps.
- Account statements. Statements separate closed positions from open positions at the report date. See Account statement.
- News and reports. Analysts talk about "positioning" or "net long" or "net short" speculative positions. This means the overall balance of traders' exposure in a market, not any single account.
Precise definition and edge cases
Formally, a position is the net quantity of an instrument held at a given time, valued at the current market price. It is signed positive for long and negative for short.
- Order, deal and position are different things. An order is an instruction. A deal (fill) is an executed transaction. A position is the open exposure that deals create. See Fill and partial fill.
- Netting vs hedging. In MT5 netting mode, all deals on a symbol merge into a single net position. In hedging mode, separate long and short positions on the same symbol can stay open at the same time.
- Gross vs net. Hedged (locked) positions can show a small net exposure while the gross volume is large. Swaps and spreads apply to each leg.
- Partial close. Closing part of the volume realises that part's result. The rest stays open.
- Forced close. If margin falls below the stop-out level, the platform can close positions without your instruction.
Related terms
Exposure, Contract size, Counterparty, Swap fees, Trading basics, Trading glossary.
Frequent questions
What is a position in trading?
It is an open trade: exposure to an instrument whose value changes with the price until you close it.
What is the difference between a long and a short position?
A long position profits from a rising price. A short position profits from a falling price. Each loses money if the price moves the other way.
Is a pending order a position?
No. A pending order becomes a position only once it is filled.
Does an open position cost anything overnight?
CFD and forex positions held through the daily rollover usually carry a swap, which can be a charge or a credit. Check the instrument's swap in your platform.
Can my position be closed without my action?
Yes. Stop loss and take profit levels close positions automatically, and a stop-out can close them when margin is insufficient.