Essential

Net Position

The difference between long and short positions in a particular instrument or market.

Definition

Net position is your overall exposure in a market after accounting for both long and short positions. If you're long 3 lots and short 1 lot, your net position is long 2 lots. It represents your actual directional exposure.

How It Works

Long 5 lots EUR/USD, Short 2 lots EUR/USD = Net long 3 lots
Net position determines profit/loss from price moves
Zero net position = fully hedged
Reported in COT (Commitment of Traders) reports

Trading Tips

Always know your net exposure

Multiple positions can hide true risk

Brokers calculate margin on net position

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