A long position represents upside exposure to the underlying asset. The holder benefits when prices move higher; in derivatives, a long position can be a contract or instrument that provides upside exposure, such as a long futures contract or a long call option.
Market participants take long positions to express a view that prices will rise or to gain exposure to upside in an underlying asset. In futures markets, the long contract position participates in price movements and settles at expiration either by cash settlement or delivery, depending on contract terms. In options, a long call offers upside potential, while a long put provides exposure to price declines; price changes determine gains and losses through intrinsic value and time value. Traders also use long positions to hedge existing exposures and to participate in price discovery, often alongside short positions as counterparties.
Long positions interact with leverage, margin, and funding costs, and may require maintenance margins or variation margins. Understanding the behavior of long positions helps explain how price movements in derivatives markets reflect expectations for future prices and how market makers and speculators contribute to liquidity.
An investor takes a long futures position on crude oil; if the futures price rises toward settlement, the long position gains value.
Short position · Futures contract · Option (call/put) · Hedging · Leverage · Margin · Price discovery