Recently heard the phrase "traffic in position..." issued by controller to one of the pilots, just wondering, what could it mean?
The phraseology in the question is incorrect.
If the planes on on the same runway without ASDE-X, the aircraft departing will be given:
DELTA 2-7, RUNWAY 1, LINE UP AND WAIT, BOEING 7-2 6-MILE FINAL
The arriving aircraft will not be given a landing clearance until the holding aircraft has departed, but it will be told:
AMERICAN 4-2-9, RUNWAY 1, CONTINUE, TRAFFIC HOLDING IN POSITION
If the planes are on different runways, it would be:
DELTA 2-7, RUNWAY 1, LINE UP AND WAIT, TRAFFIC LANDING RUNWAY 19
and the other
AMERICAN 4-2-9, RUNWAY 1-9, CLEARED TO LAND, TRAFFIC HOLDING IN POSTION RUNWAY 1
"Traffic in position" is a phrase to let the next aircraft inbound to a runway know that another aircraft is in lined up and waiting for departure on that runway. This procedure is used to line an aircraft up on the runway (usually right after the previous arrival crosses the runway threshold, or previous departure begins their takeoff roll), to have them ready to go, when the previous arrival/departure clears the runway. At airports (in the US), without ASDE-X (a system to track airplanes on the ground), the tower controller isn't supposed to clear the next aircraft to land, until they have issued the takeoff clearance to the aircraft holding on the runway. ASDE-X locations can clear aircraft to land, as long as certain conditions in the ASDE-X equipment are working properly.