What are long and short positions in trading

Updated: 7 November 2026

In short: A long is buying in the expectation that price will rise: buy lower, sell higher. A short is selling in the expectation that price will fall: sell higher, buy back lower. In trading you can profit in both directions.

How a short works

The broker or exchange lends you the asset, you sell it at the current price and later buy it back and return it. If price fell, the difference is yours. On futures and CFDs it is a single "Sell" button.

Why shorts are risky

Price can rise without limit, so a short without a stop-loss has, in theory, unlimited loss. A stop is mandatory both ways.

Long and short in numbers

Long: you buy ETH at $3,000 and sell at $3,150 — a $150 profit per coin. Short: you sell ETH at $3,000 (borrowed from the exchange or via a futures contract) and buy it back at $2,850 — also $150 profit. If instead price rises to $3,150 while you are short, the loss is the same $150. The mechanics mirror each other: a long earns on a rise, a short on a fall.

How not to mix up the direction

A simple rule: long means you expect price to rise; short means you expect it to fall. In a long the stop-loss goes below entry, in a short — above. If your stop in a short ends up below the entry price, it is a mistake and the trade will close immediately. Beginners mix this up at first, so before every entry say it out loud: "I expect a rise/fall, my stop goes below/above".

What to do today

Find a stretch on the chart where price clearly fell and imagine you opened a short at its start: where would the entry, the stop and the exit be? Then find a rising stretch and do the same for a long. In the Extremum simulator you can open both longs and shorts on live prices — on a virtual account with no risk.