Taking a Short Position Law and Legal Definition
A person entering into a commodity futures contract to sell a commodity, viz, to deliver the commodity, is obligated to deliver the commodity in the delivery month, unless he has disposed of the contract in the meantime; this is known as taking a short position. [New Mexico Timber Co. v. Commissioner, 84 T.C. 1290, 1293 (T.C. 1985)].
