What Is a Long Position? Definition & Example

Going long means positioning to profit from a price increase. On spot you simply buy the asset and hold it. On a perpetual future you open a long contract, which gives the same directional exposure with leverage and without ever taking custody of the underlying.

The arithmetic is straightforward: profit equals (exit price − entry price) × position size. Buy 20 units at $100 and sell at $112 and you have made $240 on a $2,000 position — a 12% return that matches the 12% price move.

A long has a bounded worst case. Price cannot fall below zero, so the most you can lose on an unleveraged spot long is 100% of what you put in. With leverage, liquidation ends the position well before that, at roughly entry × (1 − 1 ÷ leverage).

This bounded downside is the structural reason longs feel more comfortable than shorts, and it is why most retail positioning skews long. That skew has a cost: when everyone is long, funding turns positive and longs pay shorts to hold, so the crowded side is also the side paying rent.

One thing worth internalising: with leverage, a long is not simply "buying". You are borrowing to buy, paying funding for the privilege, and accepting that a large enough adverse move closes the trade permanently — even if price recovers an hour later.