Since stock markets are risky and risky for investors, they are markets where both gains and losses can be quite high. The stock markets, the marketplaces where company shares are bought and sold, entered a new era with the rise of cryptocurrencies and crypto money exchanges appeared before us. As cryptocurrency exchanges become more interesting than the traditional stock market concepts for long positions and short positions has become more intriguing than ever before.

In short, even if it sounds like a kind of doubling for long short, in fact these two positions are literally opposites of each other. With the most basic definition, it is possible to say an effective investor tactic for these positions, which are created by investors to meet different expectations with different goals. Bride What are long positions and short positions, what are their advantages and disadvantages Let’s look at the most frequently asked questions in detail.

• What we say is for informational purposes only, it is not investment advice.

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What is the long position adopted by those striving for the future?

A long position, as the name suggests, is an investor position. It is a position it holds for a long time by adding a financial asset that it believes will increase in value in the future to its investment portfolio. The reason why this position is called long is that the investor will both hold the asset for a long time and get the real profit in the long run.

In fact, the long position does not force the investor into anything. You take the long position, which is also defined as buying the asset. possess the asset at all times You can close the position. Of course, when you sell an asset that you believe will generate a profit in the long run, the profit and loss results may not be as you planned.

What are the pros and cons of a long position?

• Long position benefits;
  • You can reduce the risk you take in short positions with long positions.
  • The profit guarantee is high as all types of stock markets tend to rise in the long run.
• Disadvantages long position:
  • If things don’t go the way you planned, let alone make a profit, you could lose.
  • The negative effects of immediate events on short-term prices can also negatively impact your long position.

What is the short position used by those who want to take quick action in a short period of time?

A short position, called short selling, A position in which an investor sells an asset to buy back later. If you think an asset in your portfolio will decline in value but will later revalue or appreciate more, open a short position, sell the asset and buy it again.

You could say that buying a long position is equivalent to borrowing a short position. For example, you have a $1000 asset and as a result of your analysis you predicted that this asset will lose value in the future. You sold it right away and started waiting. Your analysis was correct and the asset plummeted to $800. You immediately took that asset back. What happened? You made $200 profit by doing nothing.

What are the pros and cons of a short position?

• Advantages of short positions;
  • If everything goes according to plan, you can make high profits in a short period of time.
• Disadvantages short position:
  • It is much riskier than a long position.
  • When you want to buy back, the price can be much higher than when you sell it.
  • The profit you intend to make depends on the selling price.

In short, the differences between long positions and short positions:

• A long position is opened for assets that are expected to increase in value and a short position is opened for assets that are expected to decrease in value.
• In a long position, the investor owns the asset, while in a short position, the asset is sold to buy back later.
• The investor officially has the right to buy and sell the asset in a long position, but is considered a debtor in a short position.
• The short position is much riskier than the long position.

It is recommended to use long and short positions together:

The main goal of the investors is to try to make maximum profit with limited capital. Therefore invest all the capital in one position It is never considered reasonable because it carries a high risk. What should be done while investing is to ensure diversity in the portfolio and follow strategies to avoid possible losses.

Of these strategies, the most commonly used is to use the long position and the short position together. long position Although it has a much lower risk It can pay off in the long run. A short position, on the other hand, can yield short-term gains, although it carries a much higher risk. Following an investment strategy that uses these two positions together will increase your chances of higher profits and give you the chance to avoid potential losses.

Whatever position you take, remember that there are risks:

Especially recently, with the rapid popularity of crypto money exchanges, we are starting to hear countless news. X coin left 300% profit or bankrupt Y coin investors. It is quite normal because, according to the general opinion of all economic experts, it is not possible to talk about an asset that will definitely bring profit or loss to the investors.

Both traditional exchanges and cryptocurrency exchanges have extremely delicate balances. Stock markets have always been the most affected by economic and political structure. In other words, the investor can incur a large loss on an investment that they want to make a profit in a long position, due to a political crisis or a mild economic turmoil. In the short position, this risk is much higher.

So what to do? First of all, do not listen to the manipulations. Thanks for hearing that X asset will be very valuable. don’t sell the property or borrow and buy that asset. Of course, if you have a certain amount of capital, you have the right to invest and try to evaluate it, but keep in mind the scenarios where crypto money exchanges are turned upside down because Elon Musk made a share.

What we encounter with traditional exchanges and cryptocurrency exchanges What are long positions and short positions, what are their advantages and disadvantages We’ve covered the details you need to know about the topic by answering frequently asked questions. Let’s remind again; What we say is for informational purposes only, it is not investment advice. You can share your thoughts on the topic in the comments.