What are Going Long and Going Short?

What is Going Long?

Going long (buying) means purchasing an asset with the expectation that its price will rise in the future, allowing the trader to sell it later at a higher price. A trader who opens a long position is considered “bullish” on the asset. Instead of passively holding, traders buy and hold assets to profit from price increases. Thus, going long is a common strategy to benefit during upward market trends.

• Almost all financial markets (stocks, commodities, forex, and cryptocurrencies) allow long positions. Retail investors and hedge funds often use “buy low, sell high” strategies.

• Long positions let traders capture profits when prices go up, making it an active and optimistic investment strategy.

• The opposite of a long position is a short position, where traders sell assets expecting to buy them back later at a lower price.

What is Going Short?

Going short (short selling) means selling an asset with the expectation of buying it back later at a lower price. A trader who opens a short position is considered “bearish” on the asset. Instead of just waiting, traders use short-selling strategies to profit from price declines. Thus, going short is a way to make money when markets fall.

• Short selling exists across all financial markets, including stocks, commodities, forex, and crypto. Hedge funds and professional trading firms frequently rely on short strategies.

• Short positions allow traders to profit from falling prices and serve as an effective way to hedge against downside risks.

• The opposite of a short position is a long position, where traders buy assets expecting to sell them later at a higher price.