A directional trade is an investment strategy that involves taking a position in a financial asset with the expectation that its price will move in a particular direction. The goal of a directional trade is to profit from the anticipated price movement of the asset.
A directional position is the opposite of market neutral.
In a directional trade, the investor takes a long position if they expect the asset’s price to rise, or a short position if they expect the price to fall. For example, if an investor believes that the price of a particular stock will increase in the near future, they may buy shares of the stock in order to profit from the anticipated price increase.