Long (finance)

In finance, "long" refers to the purchase of an asset with the expectation that its value will increase. A long position is established when an investor buys an asset, such as a stock, bond, commodity, or currency, anticipating that its price will rise in the future. The investor profits if the asset's price increases and can be sold at a higher price than the purchase price. Conversely, the investor will incur a loss if the asset's price decreases.

A long position represents ownership of the asset. The potential profit is theoretically unlimited, as the price of the asset could rise indefinitely. However, the potential loss is limited to the amount of the initial investment (the purchase price of the asset), as the asset's price cannot fall below zero.

Taking a long position is a fundamental investment strategy and is the opposite of taking a "short" position, where an investor profits from a decline in an asset's price. The term "going long" is often used interchangeably with establishing a long position.

The duration of a long position can vary depending on the investor's strategy and investment horizon, ranging from short-term (day trading or swing trading) to long-term (buy-and-hold investing).