What is a net position?
In one line: Your net position is your total buying minus your total selling in one market. It shows whether you're overall long, short or flat, and by how much.
A simple example
In MES futures today:
- You buy 3 contracts.
- Later you sell 1.
Net position = 3 − 1 = long 2. Each point MES moves now changes your account by 2 × $5 = $10.
If you'd sold 4 instead, you'd be short 1. Sold exactly 3, and you'd be flat.
Net vs hedged accounts
Some platforms let you hold a buy and a sell in the same market at once. That's called a "hedging" account.
US retail forex accounts work differently. Under NFA rules, you can't hold opposite positions in the same pair, and trades close first-in, first-out. A sell simply reduces your buy. The account is always netted.
| Trades in EUR/USD | Net position |
|---|---|
| Buy 1 lot, buy 1 lot | Long 2 lots |
| Buy 2 lots, sell 1 lot | Long 1 lot |
| Buy 1 lot, sell 1 lot | Flat |
Why it matters
Your net position is what actually moves your account. Holding "a long and a short" in the same market can look clever, but if they're the same size, the net is zero, and you're paying Spreads and fees for no exposure.
It also matters across markets. Long EUR/USD and long GBP/USD are two trades, but they often move together. Your real exposure to the US dollar is close to double. See Correlation.
A common mistake
Adding to a losing trade without noticing the net. Buy 1, it drops, buy 1 more, it drops, buy 1 more. Now you're long 3 with a stop meant for 1. The risk is three times what you planned.
Before every new order, check your net position and the total risk to your stop. The position size calculator works for the whole position, not just the new piece. See also Position size.
Questions
What does net long mean?
You've bought more than you've sold in that market, so you gain if price rises and lose if it falls.
Can US forex traders hedge the same pair?
Not in the same account. NFA rules require US retail forex positions in the same pair to be netted, closing first-in, first-out.
Is net position the same as position size?
Close. Position size often means one trade. Net position is the total of all your trades in that market added together.
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