Long and short positions
Also called: going long · going short · long · short
Definition
A long position profits when an asset's price rises, and a short position profits when its price falls.
This entry is shown in English.
How Long and short positions works
Going long is the familiar idea of buying low and selling high. You can go long by buying a coin on the spot market or by opening a long futures position. Going short means you profit from a decline. In crypto this is usually done with perpetual futures, by spot margin borrowing, or with options.
The risk profiles differ. In spot, a long's maximum loss is what you paid, because price cannot fall below zero. A short has no natural ceiling on losses, because price can keep rising. With leveraged futures, both sides can be liquidated if price moves against them far enough.
Longs and shorts are always matched in futures: for every long contract there is a short. That is why funding rates exist on perpetuals, and why the long/short ratio on an exchange only compares how many accounts lean one way, not the total size.
Example
Suppose two traders each open a 1,000 USDT position on a token priced at 2.00 USDT, so 500 tokens each. One goes long and one goes short. If the price rises to 2.30, the long gains 500 × 0.30 = 150 USDT and the short loses 150 USDT. If it falls to 1.60, the long loses 200 USDT and the short gains 200 USDT, before fees and funding.
Common mistakes
- Assuming shorting is just the reverse of buying with the same risk; a short's loss can keep growing as price rises.
- Opening a short on a thin, heavily shorted coin without considering a short squeeze.
- Forgetting that funding can make holding one side expensive over time.
Learn and practise
Try it on an exchange
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What does it mean to go long in crypto?
It means taking a position that profits if the price rises, either by buying the coin or by opening a long futures contract.
How do you short crypto?
Most commonly with perpetual futures, by opening a short position. You can also borrow and sell coins with spot margin, or buy put options.