Share story

Q: What’s a “full position” in a stock?

A: Imagine that you want to invest $2,000 in a company.

If you don’t have much money at the moment, or if you think the stock has a decent chance of falling soon, you might buy just $1,000 worth right now and plan to add $1,000 later.

That $1,000 would represent a half position in the stock.

Once you owned the $2,000 worth that you wanted, you’d have a full position.

A full position varies by person. It’s the size of the investment you aim to have in a security.

Q: With the stock market reaching record highs, you sometimes hear about “tulipmania” in Holland. What was that all about?

A: Tulips occasionally are mentioned in financial stories. They’re references to the great “tulipmania” that took Holland by storm in the mid-1600s.

It’s one of the first documented cases of a speculative investing frenzy. People were taking out loans on their homes in order to buy tulip bulbs. Prices soared to the modern-day equivalent of tens of thousands of dollars per bulb.

Eventually, the proverbial bubble burst, wiping out many investors.

The Motley Fool