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Position
The state or situation of an account or entity at a given date in relation to a financial variable (for example interest rate, foreign exchange rate, market prices, the value of an index) which characterizes financial instruments or commodities that the entity owns, or will receive or deliver in the future.
The position in a financial asset is the balance of the entity's commitments with respect to the asset: value held + value receivable - value deliverable. The balance may be nil, in which case the position is a closed out position. When the balance is not nil, the position is an open position or a net position. A positive net balance is a long position whereas a negative net balance is a short position. By establishing a position, the entity's risk exposure can be determined based on the market changes that are expected to affect the relevant financial variable.
Translations
Synonyms and variations
- Closed out position
- Long position
- Short position