What is a long and a short stock?

Here’s the long and the short of it! The distinction between going long and going short is brief but important: Being long a stock means that you own it and will profit if the stock rises. Being short a stock means that you have a negative position in the stock and will profit if the stock falls.

What is the difference between a long and a short position?

Long and short positions are used by investors to achieve different results, and oftentimes both long and short positions are established simultaneously by an investor to leverage or produce income on a security. Long call option positions are bullish, as the investor expects the stock price to rise and buys calls with a lower strike price.

What is the difference between a short put and a long put?

This position allows the investor to collect the option premium as income with the possibility of delivering their long stock position at a guaranteed, usually higher, price. Conversely, a short put position gives the investor the possibility of buying the stock at a specified price, and they collect the premium while waiting.

What is the difference between a short seller and a long seller?

A short seller borrows stock from a broker and sells that into the market. Later the investor expects to repurchase the stock at a lower price, pocketing the difference between the sell and buy prices. That is, while longs try to buy low and sell high, shorts try to sell high and buy low.