Legal Definitions - position

In finance, a position refers to the total amount of a specific investment that an individual or entity holds in a particular asset or market. It describes the quantity of a financial instrument, such as stocks, bonds, or commodities, that someone owns or has committed to buy or sell.

• Example 1: Individual Stock Investment

  Maria decides to invest in a growing technology company and purchases 250 shares of its stock. Her position is 250 shares of that specific company's stock. This illustrates her direct investment and ownership quantity in a particular security.

• Example 2: Mutual Fund's Market Exposure

  A large mutual fund manager allocates a significant portion of the fund's capital to government bonds, holding $50 million worth of various U.S. Treasury securities. The fund has a substantial position in the government bond market, reflecting its overall investment exposure to that asset class.

• Example 3: Short Selling in Commodities

  A commodities trader anticipates a future decline in the price of crude oil. To profit from this expected drop, they sell 10 futures contracts for crude oil, which they do not yet own, planning to buy them back later at a lower price. The trader has a short position of 10 crude oil futures contracts, representing their commitment to sell a specific quantity of a commodity.