This is a short article that will explain some of the terms that you can find in the world of trading.
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You will often hear from people in the environment talking about being Long or being Short
This is the result of a diametrically opposite view of the market by the trader.
Being Long means having purchased the financial instrument.
Being short means having borrowed the financial instrument.
In fact, in the world of trading we can not only buy an asset, assume a share or a cryptocoin, but also borrow it. It all depends on how we consider the future trend of this action, like the rise or fall of the price.
The market can be defined as bullish or bearish, in the event that it is increasing in value or losing value. There are two animals that describe the uptrend or the downtrend
The bull is the uptrend market. In fact, it is defined as the bull market. The bull strikes from the bottom up.
The bear is the downtrend market. Hence Bear Market, as the bear strikes from top to bottom.
Long means being the owner of the asset. Our hypothesis is that the market is bull so the asset’s value will go up so we will wait for the value to rise to sell it at a higher price
Being short means that we think the value of an asset will go down, we will be in a bear market, so we are going to borrow the asset from a lender. We will sell our asset at € 5, it will drop to € 3 and we will buy it back at this amount so as to give it back to the previous lender. The 2 euro difference is your earnings
Always check your broker’s costs regarding being short, they must be carefully monitored to manage them in the best possible way.