Long (finance)

In finance, a long position in a financial instrument means the holder of the position owns a positive
amount of the instrument. The holder of the position has the expectation that the financial instrument will
increase in value.[1] This is known as a bullish position.

Security
In terms of a security, such as a stock or a bond, or equivalently to be long in a security, means the holder of
the position owns the security, on the expectation that the security will increase in value, and will profit if
the price of the security goes up. Going long[2] a security is the more conventional practice of investing.

Future
Going long in a future means the holder of the position is obliged to buy the underlying instrument at the
contract price at expiry.[3] The holder of the position will profit if the price of the underlying instrument
goes up, as the price he will pay will be less than the market price.

Option
An options investor goes long in an underlying investment (in technical jargon, the preposition "in" is
omitted) by buying call options or selling put options on it. This is different from going long by buying the
underlying or trading in futures, because a long position in an option does not necessarily mean that the
holder will profit if the price of the underlying instrument goes up. Going long in an option gives the right
(but not obligation) for the holder to exercise it.[4] If the price rises to above the strike price, the owner of a
call option will probably exercise the option to buy the instrument and (at least on paper) will gain if the
difference between the price at that time and the strike price is greater than the premium which he paid.
With a put option on the other hand, the seller of the option will profit (on paper) if the price of the
instrument goes up (so that the option is not exercised by the buyer), or falls by less than what he received
as a premium.

See also
Short (finance)
Position (finance)

References
1. "Stock Purchases and Sales: Long and Short" (https://www.investor.gov/introduction-investin
g/basics/how-market-works/stock-purchases-sales-long-short). Investor.gov. U.S. Securities
and Exchange Control. Retrieved 20 May 2019.
2. Harrington, Shannon D.; Catts, Tim (Sep 12, 2010). "Bond Buyers Who Went Long Get
Burned on Yields: Credit Markets" (https://www.bloomberg.com/news/articles/2010-09-12/bo
nd-buyers-getting-burned-by-going-long-as-yields-climb-credit-markets). Bloomberg.com.
Bloomberg News.
 3. Roos, Dave (2019). "Futures Contracts 101 - Futures Contracts" (https://money.howstuffwork
s.com/personal-finance/financial-planning/stock-future1.htm). HowStuffWorks. Infospace
Holding LLC. Retrieved 20 May 2019.
4. "Options" (https://www.investor.gov/additional-resources/general-resources/glossary/option
s). Investor.gov. U.S. Securities and Exchange Control. Retrieved 20 May 2019.

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