The neutral, or passive, stance is your natural, unprepared position. It is extremely useful for all aspects of training, considering that, on the street, you will most likely need to perform combatives and self-defense techniques without any preparation. Be sure to train from this position at least part of the time when working on combatives, and at all times when practicing self-defense techniques.
THE STANCE: Stand with your feet about hip-width apart (or less), with your arms hanging to the sides.