In finance, the term 'Long position' or 'Long' is used to describe the
ownership of a stock, security, contract,commodity or another financial
instrument.In other words the buying of a financial instrument with the
expectation of rise in price is called Long.It is the opposite of the
'short position' or 'short'. If one person or entity is long on a
security, it means that the holder owns the security or financial
instrument. He will get profit if the price rises. The 'long position'
(long) is established by placing a buy order.If an investor is long on 100 shares of SBIN, it means he owns 100 shares of SBIN.
A trader can go long on underlying instrument by buying call options or writing put options.The call seller can be long on an underlying if he has the shares on hand.If the number of contracts bought exceeds the number of contracts sold, he is said to be long.If you want to close a long position, you must sell an equal amount of the same security to reduce your long position to zero.
If a trader on investor is long on a security, the risk factors are less compared to short on that scrip.But it does not mean that there is no risk. Bull markets are better to go long on a stock. One must keep stop loss to avoid heavy losses while trading.
