Although previous research has shown that letter position information for the first letter of a parafoveal word is encoded less flexibly than internal word beginning letters (Johnson, Perea & Rayner, 2007; White et al., 2008), it is not clear how positional encoding operates over the initial trigram in English. This experiment explored the preprocessing of letter identity and position information of a parafoveal word's initial trigram by adults and children using the boundary paradigm during normal sentence reading. Seven previews were generated: Identity ("captain"); transposed letter and substituted letter nonwords in Positions 1 and 2 ("acptain-imptain"); 1 and 3 ("pactain-gartain"), and 2 and 3 ("cpatain-cgotain"). Results showed a transposed letter effect (TLE) in Position 13 for gaze duration in the pretarget word; and TLE in Positions 12 and 23 but not in Position 13 in the target word for both adults and children. These findings suggest that children, similar to adults, extract letter identity and position information flexibly using a spatial coding mechanism; supporting isolated word recognition models such as SOLAR (Davis, 1999, 2010) and SERIOL (Whitney, 2001) models.