Net Position
The difference between long and short positions in a particular instrument or market.
Quick answer
Net position is your overall exposure after offsetting longs against shorts. Long 3 lots and short 1 lot leaves a net position of long 2 lots.
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
1
Always know your net exposure
2
Multiple positions can hide true risk
3
Brokers calculate margin on net position
Related Terms
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