When investing your capital is at risk. In the end, she earns a profit of $1500, excluding any commission to be paid. If you bought (went long) 100 shares of stock at $30 and sold at $50 you make $2,000. When you go long on a trade, it means you are buying that stock; when you sell a stock, you are shorting the stock. Compared to long trading, short trading can be a bit tricky to understand for novice traders. Remember, the more you work hard, the more fruits you would bear later. Say a stock is trading at $50. There are many stocks in the stock market as well, which earn more profit while having a short position than a long position. If someone says “I am going short XYZ at $14” it means they intend to short sell XYZ at $14. It is also referred to as short selling or shorting. Traders sell the stock first here, with a view that the prices would go down, and when the prices fall, traders buy the stock back to close your trading position. For more day trading terms, check out Basic Day Trading Terms. Currency Abbreviations by Country – Money Abbreviations, How to Short a Currency – Short Selling Currency Explained. The purpose of going long is to buy at a lower price and sell at a higher price in the futures, whereas going short has the purpose of selling the stock first at a high price, and buying it back when the price falls. As a trader, if you have taken a long trade order, it means you have already bought the stock and are waiting to short it when the price soars. Long and buy are the same options, though many times, some trading software gives options of long instead of buy. In short selling, professional traders only care about the moving market and not the directions of moving prices, and thus regardless of the fact whether the market is going up or down, they tend to gain profit. Goigng short means to sell without first owning. The stock market or forex market has various terms attached to it, one of such terms is long trades vs short trades. Long/short equity is an investing strategy of taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline. Forex Strategies Guide for Day and Swing Traders, Forex Strategies Course For Weekly Charts, Front-Running Chart Patterns Strategy (Video), Day Trading the EURUSD – Basics, Strategies, and Indicators, Two Decades of Changes at Top Five Corporate America. Trades can buy long and sell short in various financial markets, including the stock market, commodity market, forex market, etc. The Buy and Sell concept in trading is the same as long and short trading. If the stock goes to $60, it now costs $6,000 to buy 100 shares, but you were only credited with $5,000….you are losing $1,000. The question is, how do you sell something you don’t own? Learn forex trading, investing in stocks, commodities. Short: to sell an asset without owning it first. Here’s a quick review of what these trading terms mean. This was the practice in Europe too. Just like giving long options while trading, many software writes short instead of selling. A “bear market” is when prices are falling. Investing is speculative. Let us take an example here, Grey is a stock market trader and is thinking of going long on a stock named ABC, which is trading at $25 right now. Over 300 pages, forex basics to get you started, 20+ forex trading strategies and a 5 step plan for forex trading success. Two words related to long and short are “bullish” and “bearish.” These words also indicate which direction the price of an asset is moving, or which direction a trader thinks it will move. For more detail, view the Legal Disclaimer page. The maximum profit a trader can make by short selling is until the price of a stock reaches 0. If someone is a bull or bullish, they think prices will rise. In short, selling, for you to sell shares that you do not own, your broker has to borrow the shares from someone else in the market; without that, you cannot take a short position in the market. At the same time, the maximum loss is unlimited as prices can increase to any extent. When you are long (own shares), to exit the position you sell the shares. A bear attacks by swiping down with its paw. With trading examples and charts. Assume you sell 100 shares of ZYZ stock at $50, without owning it or having bought it first. The world of trading has its own terminology, and long and short are terms you’ll hear frequently.