Position

In trading, the term position refers to a specific investment – generally a group of identical securities or assets purchased by an investor through a broker in a single order.

You may hold multiple investment positions made up of identical assets. It is also possible for positions to be opened at identical prices.

The primary factor which determines whether two different investments are different investment positions is whether or not they were both made using a single order or multiple orders.

Each investment position can be closed individually.

Example: You use an online trading platform to buy 100 shares in a Swiss company at 39.50 francs per share. Shortly afterwards, you buy another 100 shares in the same company for 39.50 per share. Even though both orders were for the same asset and were executed at the same price, they are two separate positions. You could close one position by selling the 100 shares while keeping the second position open and holding those 100 shares.

A position may be long (profiting from gains in an asset's value) or short (profiting from losses in an asset's value). Most brokers allow investors to hold both long and short investment positions for the same asset simultaneously so that they can hedge against losses.

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.