Owning a security with the expectation that its price will rise, allowing you to sell later at a profit.
A long position means you have purchased and own a security, betting that its price will increase. When you "go long" on a stock, you profit if the price rises above your purchase price and lose 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 means the shares are credited to your demat account and you hold them until you choose to sell — this could be days, months, or years. An intraday long position must be closed before market close the same day.
For example, if you buy 100 shares of HDFC Bank at ₹1,600 (total investment: ₹1,60,000) and the stock rises to ₹1,750, your profit is ₹15,000 (9.4% return). Your maximum loss is theoretically limited to your entire investment (if the stock goes to ₹0), but in practice, using Stop Loss orders limits 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 your 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. Understanding the distinction is important for risk management and choosing the right instrument for your market view.
India Context
On Indian broker platforms, CNC = delivery (long-term holding), MIS = intraday. Delivery shares settle T+1 into your demat account.