Going Long or Short - what is the difference?
"Long" and "short" are terms that every investor should know. If you want to trade cryptocurrencies, you need to know the difference.
A long position is the behaviour of an investor who buys an asset, such as a cryptocurrency, assuming that it will increase in value over time. Remember, however, that investors can also take long positions on stocks, currencies or derivatives. We believe in the increase in the value of a given asset over time. That's why a long position is associated with a bullish attitude to the market.
A short position occurs when a trader sells an asset to repurchase it later at a lower price. Usually, however, "short" refers to selling an asset that we do not own. Investors who short believe that the cost of an asset (for example, BTC) will drop over time. If this happens, they can repurchase the asset at a lower price, which will give them a profit. On the other hand, if the cost of an asset increases, a higher redemption price will result in a loss. It is worth noting that shorting is the domain of more experienced traders.
Interestingly, you can trade on long and short positions using financial leverage. Trading on derivatives can effectively increase our profits, regardless of the type of position. Remember, however, that increased profits go hand in hand with the increased risk of losing funds in an investment failure.
An interesting interface solution for short and long positions is presented by the Geco.one cryptocurrency derivatives exchange.
Exchange transparently allows us to establish and monitor both types of positions on the market. What's more, despite the possibility of using the leverage of 1:100, Geco.one also allows us to trade the deposit itself without the need to "activate" the leverage mechanism. Geco.one offers negative balance protection of your account (your loss will not exceed the amount of the security deposit). Thanks to this, you can test shorts and longs in safer conditions and learn how to trade using derivatives.