Definition
The term long position refers to the practice of buying a security with the expectation that its value will increase over time. Long positions apply to stocks, commodities, currency as well as options.
Explanation
An investor can profit from both an increase in the value of a security as well as a decrease. When a trader expects the value of a security to increase over time, they are said to be taking a long position in it. A long trade will profit from an increase in the price of a security over time, while a short trade will profit from a decrease.
The term long is sometimes associated with the term buy. Going long is also considered a more conventional way of investing, since the trader is purchasing an asset they believe will be more valuable in the future.
When used in the context of options, buying a call option is said to be a long position because the trader now holds the right to buy a security. In the same way, the writer of a call option is taking a short position.