The quantity of a security currently held by a trader or investor, either long (bought) or short (sold), representing active market exposure.
A position represents the current stake in a particular security. A purchased equity position is a "long position" - it profits when the price rises. A short sale (in futures or through securities lending) is a "short position" - it profits when the price falls.
Positions can be categorised by time horizon: intraday positions are opened and closed within the same trading session, while delivery positions are carried overnight or longer. In India's equity market, intraday trades settle on the same day (no delivery), while delivery trades follow the T+1 settlement cycle mandated by SEBI since January 2023.
Position sizing - deciding how many shares or how much capital to allocate to a single trade - is a core risk management discipline. Professional traders typically size so that no more than 1-2% of total capital is at risk on any single position. On a trading capital of INR 5 lakh, that translates into a maximum loss per trade of INR 5,000-10,000, set by adjusting quantity and Stop Loss placement.
On NSE and BSE, positions are tracked in real time by the broker's risk management system (RMS). For derivative positions, the exchange imposes margin requirements - sufficient collateral must be maintained. If margin falls below the required level, the broker issues a margin call, and if unmet, may Square Off positions to limit exposure.
Net position across related instruments matters too. A holding in Reliance combined with a short futures position in Reliance is a partially hedged net exposure. Portfolio-level position analysis surfaces the true underlying market risk.
India Context
India follows T+1 settlement for equity delivery. NSE/BSE track positions in real time. SEBI mandates margin requirements for derivative positions through the peak margin framework.