Net Position
Your net position is what remains after offsetting longs against shorts in the same asset — long 10 and short 4 is a net long position of 6.
Your net position is what is left after longs and shorts in the same asset cancel out. If you are long 10 and short 4, you are net long 6. Gross figures add both sides; net figures show your real directional bet. Regulators and platforms report both.
- Category
- Risk Management
- Reading time
- 3 min
- Also called
- Net exposure in one asset, Net long or net short
- Updated
Net position in plain words
Net figures cancel out each trader's matching long and short positions first.1
So a trader with large but balanced longs and shorts can rank among the biggest on both gross lists, yet barely appear on the net list.1
Trading platforms group positions in a similar way, rolling related sub-positions into one net position.2
How to work out a net position
List the longs
Add up all long units in the asset.
List the shorts
Add up all short units in the same asset.
Offset them
Offset each trader's matching longs and shorts to get the net figure.1
Read the sign
More longs means net long; more shorts means net short.
Convert options
Convert options by delta: 500 long puts with a delta of 0.50 count as a short position equal to 250 futures.1
Compare with gross
Check spreading — big gross positions with a small net mean most of it is offset.1
Worked examples
Example 1 — Net long
Net long 6A hypothetical trader is long 10 contracts and short 4 in the same market.
| Gross | 14 |
| Net | 10 − 4 = +6 |
After offsetting equal long and short positions, 6 long remain.1
Example 2 — Flat
FlatA hypothetical trader is long 5 and short 5.
| Net | 0 |
Equal sides offset fully, so a price move barely changes the total.1
Example 3 — Options counted
Net long 100A hypothetical trader is long 300 futures and long 400 puts with delta 0.5.
| Puts as futures | −200 |
| Net | 300 − 200 = +100 |
As in the CFTC example, puts count as short futures-equivalent contracts, leaving a net long of 100.1
Net vs gross position
| Aspect | Net | Gross |
|---|---|---|
| Formula | Longs − shorts | Longs + shorts |
| Shows | Direction | Size of activity |
| Used for | Market exposure | Margin and fees |
| Hedged book | Small | Can be large |
Where traders use it
Hedging
Seeing what a Hedging trade leaves open.
Exposure
Measuring real Exposure.
COT reading
Reading positioning next to Open Interest.
Risk limits
Setting limits in Position Sizing.
Advantages and disadvantages
Advantages
- Shows true directional risk.
- Simple arithmetic.
- Matches how many reports summarise positions.
Disadvantages
- Hides gross size and costs.
- Offsets may not be perfect across months or strikes.
- Options need delta conversion.
- Margin may still be charged on both sides.
Going deeper
Read as far as you need. Each level builds on the one before it.
Offsetting
Beginner
Net means what's left after matching longs and shorts cancel.1
Gross vs net rankings
Intermediate
A trader can be huge on both gross lists yet small on a net basis, because the positions offset.1
Options in the net
Advanced
Options are counted by delta: 500 long puts at a delta of 0.50 equal a short of 250 futures.1
Common mistakes
Ignoring gross
Gross still drives costs.
Mixing assets
Net only within the same asset.
Forgetting options
Convert by delta.
Assuming zero risk when flat
Basis and gaps can still hurt.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Net = longs − shorts in the same asset.
- Positive is net long, negative net short.
- Gross adds both sides.
- Options count by delta.
- Net shows direction; gross shows size.
Frequently asked questions
Can I be long and short at once?
Is net zero risk-free?
Does the COT report show net?
Further learning
- Long Position
The buy side.
- Short Selling
The sell side.
- Hedging
Using offsets.
- Exposure
Total risk view.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- CFTC. Commitments of Traders Explanatory Notes (opens in a new tab) Checked .
- Saxo Bank. Net Positions – Saxo OpenAPI reference (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.