A long position involves owning an asset or holding a position that benefits from price increases. Long positions can be established through direct asset purchases, futures contracts, call options, or other derivatives that provide positive price exposure. Long positions express bullish market views and profit when asset prices rise above entry levels.

Long positions carry unlimited profit potential as prices can theoretically rise indefinitely, but losses are limited to the amount invested (except for leveraged positions). Managing long positions involves monitoring fundamental factors that support price appreciation while using stop-loss orders or hedging strategies to limit downside risk. Position sizing and diversification help manage concentration risk.

Real-world example: A trader establishes a long position by buying 1,000 shares of Tesla at $250, profiting $50,000 if the stock rises to $300 but limiting loss exposure to the $250,000 initial investment if proper risk management is applied.