What is 'Net Long'

Net long refers to a condition in which an investor has more long positions than short positions in a given asset, market, portfolio or trading strategy. Investors who are net long will benefit when the price of the asset increases.


Net long is a term used broadly across the investment industry. Investors and market traders can take either a long or short position on an investment. Long positions are typically taken by bullish investors and short positions are associated with bearish investors. Net long can be a calculation of a single position or it can refer to an entire portfolio comprehensively. It can also generally refer to a market view.

Speculators often view market traders’ positioning in an asset as a signal of the market’s expectation for the asset’s future price. For example, traders’ positioning on crude oil and euro versus dollar contracts are two assets highly followed in the investment markets. Both saw significant net long positions in the second half of 2017 as bullish bets were more favorable than short positions signaling an uptrend for the assets overall.

Investors take a net long position when they buy and hold securities for the long term. A net long position can also occur from multiple investments. Mutual funds often have the option to take both long and short positions to achieve the targeted objective of the portfolio. Therefore, the net long position would typically be calculated by subtracting the market value of short positions from the market value of long positions. In a net long portfolio the market value of long positions is greater than short positions. Some mutual funds may be restricted from short selling, which means 100% of the securities are bought and held for a full net long position.

Short Positions

Individually, retail investors are not typically known for taking deep short positions, making the net long portfolio a common and usually expected investing situation for individuals. In larger portfolios such as institutional and high net worth accounts, short positions may be more common. Some portfolio investment strategies may focus entirely on short positions for achieving the investment objective. The ProShares UltraPro Short S&P 500 ETF (SPXU) is one example of a portfolio taking a comprehensive short position on the S&P 500. Opposite of a net long strategy, SPXU uses a short selling strategy. In the ProShares UltraPro Short S&P 500 ETF the majority of the portfolio is comprised of short positions on the S&P 500 Index resulting in a net short position.


  1. Net Short

    Net short is a portfolio or trading position leveraged to an ...
  2. Buy To Close

    Buying to close involves purchasing an offsetting position to ...
  3. Weak Shorts

    Weak shorts refer to traders or investors who hold a short position ...
  4. 130/30 Mutual Fund

    A mutual fund that has long positions and short positions in ...
  5. Short Sale

    A short sale is the sale of an asset or stock unowned by the ...
  6. Short Selling

    Short selling is the sale of a security that is not owned by ...
Related Articles
  1. Investing

    Using Short ETFs to Battle a Down Market

    Instead of selling your stocks to get gains, consider a short selling strategy, specifically one that uses short ETFs that help manage the risk.
  2. Investing

    Short Selling Risk Can Be Similar To Buying Long

    If more people understood short selling, it would invoke less fear, which could lead to a more balanced market.
  3. Investing

    Why Short Sales Are Not For Sissies

    Short selling has a number of risks that make it highly unsuitable for the novice investor.
  4. Trading

    How To Protect A Short Position With Options (FB, AAPL)

    Short selling can be a risky endeavor, but the inherent risk of a short position can be mitigated significantly through the use of options.
  5. Investing

    Why Are Hedge Funds Selling Off Bullish Oil Positions?

    Hedge funds cut their long positions in oil futures and options contracts amid concerns oil prices are weakening.
  6. Investing

    Rules and Strategies For Profitable Short Selling

    Short sales work well in bull and bear markets but strict entry and risk management rules are required to overcome the threat of short squeezes.
  7. Financial Advisor

    The 5 Most Shorted NYSE Stocks (VALE, CHK)

    Understand what a short sale is and why people would want to initiate a short strategy. Learn about the top five most shorted stocks on the NYSE.
  1. What is the difference between a short squeeze and short covering?

    Learn about short covering and short squeezes, the difference them and what causes short squeezes. Read Answer >>
  2. How long can a trader keep a short position?

    Learn whether there are any limitations on how long may an investor hold a short position, and explore the costs associated ... Read Answer >>
  3. What Part of a Company's Float Can Be Shorted?

    The quick answer: The number of shares shorted can actually exceed 50% of the float in a company. Read Answer >>
  4. How long can you short sell for?

    In theory, you could keep a short position open indefinitely, but in practice, a lender can demand you "buy to cover" the ... Read Answer >>
Trading Center