Position is your placement in relation to the dealer. Each position is categorized as early, middle, or late. Each represents a third of the players' respective betting order. In Omaha and Hold'em, the dealer has the best position. This is because they are in the late position in every round of betting, while the blinds are last to act pre-flop and first to act after it.
Early Position
When you are in the early position, you will be acting early in the hand and do not have as much information about the other players' hands.

Middle Position

While better than the early position, you still only have information about the players before you and you have as many acting after you.
Late Position

A great position to be in as you know what the pot odds for the hand are and have seen most of the other players’ actions.

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You can play more hands when in the late position than you can from an early position. This is because you have more information. You also have more bluffing opportunities in the late position because you can raise with hands you wouldn't have from the early position and possibly take pots uncontested.
When talking about playing position, it should be mentioned that ideally you want loose or weak players to you right and strong or tight players to you left. Loose or weak players will stay in too many hands and provide you with better pot odds because you have position on them. This position gives you the option to capitalize on their mistakes and take their money. With tight players on you left, there is a better chance of getting them to fold with bluffs and strong raises.

Position has much more importance in Pot-Limit or No-Limit flop games like Hold'em and Omaha. This is because the bluffing opportunities (due to limited value raises) in these games are much greater than in limit games. Plus, your position does not change through each round of betting unlike 7-Card Stud.

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