Long position
A long position begins when a trader buys an asset and plans to sell it later. Marker A shows an example purchase at $100. This is the entry. The green horizontal line marks the entry price across the chart.
Marker B shows the sale at $110. This is the exit. The red horizontal line marks the exit price. A long position makes a profit when the exit is above the entry. It makes a loss when the exit is below the entry.
Compare the two lines before calculating the result. The red exit line is above the green entry line, so the result is a profit. The distance between the prices determines its size.
Long result per share = exit price − entry price
$110 − $100 = $10 profit per share before costs
The word long describes the direction of the position, not how long the trade remains open. A long position can last for minutes, days, or longer.
This example uses one share, so the total profit is also $10. With more shares, the same price change produces a larger total result. Trading fees can reduce the final profit. The next chapter explains how quantity changes the calculation.
Did the long position from $100 to $110 produce a profit or a loss?
Choose one answer.