Owning a security with the expectation that its price will rise, allowing you to sell later at a profit.
A long position means the trader has purchased and owns a security, with the view that its price will increase. A long stock position profits if the price rises above the purchase price and loses if it falls. This is the most intuitive and common form of investing - buy low, sell high.
In Indian markets, taking a long position in equities can be done in two ways: delivery (CNC) and Intraday (MIS). A delivery long position credits shares to the demat account and they are held until sold - days, months, or years. An intraday long position must be closed before market close on the same day.
For example, a purchase of 100 shares of HDFC Bank at ₹1,600 (total investment ₹1,60,000) gains ₹15,000 (9.4% return) if the stock rises to ₹1,750. Maximum loss is theoretically limited to the entire investment (if the stock goes to ₹0); in practice, Stop Loss orders cap the downside well before that point.
Long positions can also be taken through derivatives. Buying a Nifty futures contract is a leveraged long position on the Nifty 50 index. Buying a call Option is a limited-risk long position where maximum loss is the premium paid. Each approach has different Margin requirements, risk profiles, and tax implications.
In the context of derivatives, a long position on futures has unlimited profit potential and unlimited loss potential. A long position on a call option has unlimited profit potential but loss is limited to the premium. The distinction matters for risk management and for selecting the instrument that matches a given market view.
India Context
On Indian broker platforms, CNC = delivery (long-term holding), MIS = intraday. Delivery shares settle T+1 into your demat account.