# Long Positions > Going long means buying an asset to profit if its price rises. Learn how long positions work, how profit and loss are calculated and how to manage the risk. Source: https://learn.tradelabsai.com/markets/long-positions/ Track: Markets and Instruments · Level: Beginner · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Long Positions", https://learn.tradelabsai.com/markets/long-positions/ A long position, or simply being "long", means you own an asset or a contract that gains value when the price rises. If you buy 100 shares of a company, you are long 100 shares. Going long is the most familiar kind of trade: buy low, sell higher. Its opposite is a short position, which profits when prices fall. See [Short Selling](https://learn.tradelabsai.com/markets/short-selling/). ## How a long trade works A long trade has two steps: open by buying, close by selling. **Example: A long stock trade** You buy 50 shares at $40.00, a $2,000 position. If the price rises to $46.00 and you sell, your profit is ($46.00 minus $40.00) × 50 = $300, a 15% return before costs. If the price falls to $36.00 and you sell, your loss is $4.00 × 50 = $200, a 10% loss. ``` Long P&L = (Exit price − Entry price) × Quantity − Costs ``` The most you can lose on a long stock position bought without borrowing is the full amount invested, if the price goes to zero. The potential gain has no fixed limit, because a price can keep rising. ## Ways to be long You can be long through many instruments, each with different risk: | Instrument | How you are long | Key difference | |---|---|---| | Shares or crypto | Buy and hold the asset | Simple; loss limited to what you paid | | Margin account | Buy with borrowed money | Losses can exceed your own money; interest costs | | Futures | Buy a contract | Leveraged; daily settlement | | Call options | Buy the right to buy | Loss limited to the premium; time decay | | CFDs | Buy a contract for difference | Leveraged; overnight financing; not for US retail | | Prediction markets | Buy Yes or No shares | Each share pays $1 or $0 at settlement | ## Unrealised and realised profit While your position is open, any gain or loss is **unrealised**: it exists on paper and changes with the price. When you sell, it becomes **realised**, which matters for taxes and for your actual account balance. Traders who refuse to realise losses, hoping prices recover, often turn small losses into large ones. See [Disposition Effect](https://learn.tradelabsai.com/psychology/disposition-effect/). ## Managing a long position 1. **Decide the exit before the entry.** Know where you will sell if wrong, usually a level below which the reason for the trade no longer holds. See [Stop Loss Strategies](https://learn.tradelabsai.com/risk/stop-loss-strategies/). 2. **Size from the stop.** If your stop is $3 below entry and you risk $150, buy 50 shares. See [Position Sizing](https://learn.tradelabsai.com/risk/position-sizing/). 3. **Plan the profit exit.** A target, a trailing stop or a rule such as selling half at a target and trailing the rest. See [Scaling Out and Partial Profits](https://learn.tradelabsai.com/position-management/scaling-out-and-partial-profits/). 4. **Watch for events.** Earnings and news can gap the price past your stop overnight. ## Long and the direction of the market Over long periods, broad stock markets have tended to rise, which favours long positions for investors. Traders still need to recognise when a market is falling or moving sideways, because buying into a downtrend is one of the most common losing patterns. Learning [Market Structure Basics](https://learn.tradelabsai.com/price-action/market-structure-basics/) and [Trend Structure: Higher Highs and Lower Lows](https://learn.tradelabsai.com/price-action/higher-highs-and-lower-lows/) helps you judge when long trades have the wind behind them. ## Being long more than one thing If you hold several long positions in assets that move together, such as five technology stocks, your real exposure is larger than any single position suggests. A market wide drop hits them all at once. Count your total risk across correlated positions. See [Portfolio Heat](https://learn.tradelabsai.com/risk/portfolio-heat/) and [Correlation Management](https://learn.tradelabsai.com/portfolio/correlation-management/). ## Frequently asked questions ### What does it mean to be long a stock? It means you own the stock, or a contract that gains when it rises, and you profit if the price goes up. ### What is the maximum loss on a long position? Without leverage, the amount you paid. With margin, futures or CFDs, losses can be larger than your initial deposit. ### What is the difference between long and short? Long positions profit when prices rise; short positions profit when prices fall. See [Long vs Short](https://learn.tradelabsai.com/reference/long-vs-short/). ## Sources - Wikipedia, [Long (finance)](https://en.wikipedia.org/wiki/Long_%28finance%29) ## Continue learning - Next lesson: [Short Selling](https://learn.tradelabsai.com/markets/short-selling/) - Previous lesson: [What Are Commodities?](https://learn.tradelabsai.com/markets/what-are-commodities/) - Related: [What Are Commodities?](https://learn.tradelabsai.com/markets/what-are-commodities/): Commodities are raw materials like oil, gold and wheat. Learn the main commodity groups, what drives their prices, how they are traded and the risks involved. - Related: [Short Selling](https://learn.tradelabsai.com/markets/short-selling/): Short selling means selling a borrowed asset to profit if its price falls. Learn how shorting works, borrow costs, short squeezes and why the risk is so high. - Related: [Long vs Short](https://learn.tradelabsai.com/reference/long-vs-short/): Long positions profit when prices rise; short positions profit when they fall. Compare risk, costs and how to go short in stocks, futures, crypto and options. - Related: [Position Sizing](https://learn.tradelabsai.com/risk/position-sizing/): Position sizing decides how many shares or contracts to trade so each loss stays small. Learn the formula, worked examples for each market and common mistakes. - Related: [Stop Loss Strategies](https://learn.tradelabsai.com/risk/stop-loss-strategies/): A good stop sits where your trade idea is proven wrong. Compare structure, volatility, percentage and time stops, with examples and the mistakes to avoid. - Related: [Leverage](https://learn.tradelabsai.com/markets/leverage/): Leverage lets you control a larger position with less money. Learn how leverage ratios work, how they magnify gains and losses and how to use leverage safely.