Long position

Exposure held in the direction of a rising price. It is opened at the ask and closed at the bid, so the spread is paid across the two events rather than charged as a line. In foreign exchange the description has a second half that is easy to lose: a currency pair is two currencies, so a long position in the pair is simultaneously long the base currency and short the counter currency, and a result can come from either side moving.

Holding one costs something on most instruments. Margin is held against it for as long as it is open and released when it closes. A position carried past the daily cut off attracts a financing adjustment, which for a long position in a share or index contract is commonly a debit, and a dividend adjustment applies when a constituent goes ex dividend. Those charges accrue on the calendar rather than on the outcome, so they apply whether the position is right or wrong.

Two things are widely assumed and are not true. The first is ownership: a long position in a contract for difference confers no title, no share certificate and no shareholder rights, and it exists only against the firm that wrote it, which is why it can only be closed with that firm. The second is that the deposit bounds the outcome. Profit and loss are calculated on the full contract value, so an adverse move is measured against the whole contract and is not limited to the amount deposited, and a favourable move is measured on exactly the same basis and to exactly the same degree.