There are many names associated with position to identify where players are sitting in relation to the dealer's button. Each particular position has its own strengths or weaknesses.
- The small blind has the worst position after the flop and must invest half a bet.
- The big blind invests an entire bet and similarly has a poor position.
- The player under the gun has the worst position preflop and a junk position afterwards.
- The button has the best position during any betting round.
For example, lets say you're under the gun. You have Queen-Ten, unsuited and decide to limp into the pot. The player to bet after you raises, and everyone but you folds.. Now you're in a jam. Chances are good that this player has a better hand than you. If they have any ace, king, or pocket pair, they are statistically better than you. You'd suspect that someone who raised has at least a hand like that. Now you can either call again and go into the flop as an underdog or you can fold and just give up a bet. What's worse is that if you call, you will be acting before this player for the rest of the hand.
On the other hand, let's say you're on the button. You have Queen-Ten, unsuited and everybody folds to you. One option would be to fold and let the blinds fight it out. Another would be the just call and see what happens on the flop. Many players here would raise because you could steal the blinds and even if you didn't, you'd act after them for the remainder of the hand. Raising is only a viable option because of your favorable position.
Another notable factor is that position goes hand in hand with knowing the players directly around you. For example, an aggressive, blind-stealing player to the immediate right of a tight player usually results in the tight player's blinds getting stolen.
Being in late position with a good hand has major strengths over being early with a good hand. Early position raisers are assumed to have a good hand and it tends to scare players away. Early preflop raises can force the other players to call two bets at once (or more in the case of pot limit or no limit holdem) when there is nearly nothing in the pot worth fighting for. In late position, there may be players who have already called one bet. Those players only have to call one bet (in limit) with a little something already in the pot. So players in late position with a good hand have the ability to manipulate the pot size, which will make future bets easier to call in the upcoming betting rounds.