ABSTRACT
Price risk is caused by establishing a market position which reflects the direction of risk exposure. Alternatively, the direction of price risk exposure determines the market position. If the price risk exposure is on the downside, there is a long market position. In contrast, if the price risk exposure is on the upside, there is a short market position. No price risk exposure results in a neutral market position. There are only three market positions—long, short, and neutral.
