{"id":6706,"date":"2019-03-15T08:24:52","date_gmt":"2019-03-15T08:24:52","guid":{"rendered":"https:\/\/www.wasteyourtime.co\/?p=6706"},"modified":"2020-03-25T14:18:50","modified_gmt":"2020-03-25T14:18:50","slug":"long-short-trade","status":"publish","type":"post","link":"https:\/\/traders-paradise.com\/magazine\/2019\/03\/long-short-trade\/","title":{"rendered":"Long and Short Trade"},"content":{"rendered":"

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3 min read<\/span><\/i><\/p>\n

\"TRADING
\nLong and Short refer to whether a trade was initiated by buying first or selling first.<\/span><\/p>\n

To be more specific. <\/span><\/p>\n

A long trade is opened by buying with the expectation to sell at a higher price in the future and earn a profit. <\/span><\/p>\n

But, a short trade is opened by selling, before buying, with the intent to buy back the stock at a lower price and gain a profit.<\/span><\/p>\n

In the trading of assets, an investor can take two types of positions<\/a>: long and short. <\/span><\/p>\n

And such investor can either buy an asset (going long) or sell it (going short). <\/span><\/p>\n

Long and short positions are further complicated by the two types of options, the call and put. So, the investor may enter into a long put, a long call, a short put, or a short call. <\/span><\/p>\n

Furthermore, the investor can mix long and short positions into complex trading and hedging strategies.<\/span><\/p>\n

The simplest way to classify \u201clong\u201d and \u201cshort\u201d trades is to state that in any trade, you are long of that from which you will profit if it rises in relative value. Hence, you are short of that from which you will profit if it falls in relative value.<\/span><\/p>\n

Here is the example, assume that you buy a stock of XYZ company with Euro. So, you are \u201clong\u201d stock of XYZ and \u201cshort\u201d of Euro. This is because for you to profit, the value of the XYZ company stock must rise against the Euro, or alternatively, the value of the Euro must fall against the stock of XYZ company.<\/span><\/p>\n

You should know that in a trade where you are short of a currency against some tangible asset, you would usually refer to that only as a \u201clong\u201d trade. <\/span><\/p>\n

So, not saying that you were \u201cshort\u201d of the cash denomination. <\/span><\/p>\n

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