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What is a long and short position in trading?

Lisa O'Neill


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Hello, thank you for your question! 

Traders tend to act according to the market’s sentiment and according to their expectations. Therefore, they may “go long” or “go short” with their positions. 


A long position means that the trader expects that an underlying value of the asset will gain. For example, he buys the USD/JPY currency pair, therefore he expects the US Dollar to appreciate against the Japanese Yen.


A short position means quite contrary to the long position, in this case, traders expect from an asset to lose in value, therefore they sell it. Using the same example, USD/JPY traders sell the greenback in order to buy the Yen.

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