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What is long and short position in share market?Back

A trader who is buying securities like stock, commodity, forex, future and options is called a long or long position. It is opposite of short position. Day traders will often use the terms "buy" and "long" while trading in stock market. Traders mostly use this terms like I am "Going long..." or "Go long" that means he wanted to buy a particular asset.


It means trader have bought it expecting the price will go up. In this trade when price will advance trader will earn if decline trader will lose their money. Most of the investor goes long for investment purpose, they wait for a correction then they accumulate for longer period. In international market Warren Buffet, John Templeton, in India Rakesh jhunjhunwala. They are king of the market they are professional trader and their source of income from share market.


When you're in a long position in a share, you've bought it bcz you are expecting the price will go up. For example in NSE a share XYZ is currently trading at 1225 and you are expecting that price will advance in coming months, so you bought 1000 shares. After 5 months if price jumped and you sold those shares at 1305, the difference between long and short will be your benefits and vice-versa.


Trader can go short if he is expecting the price will fall in future then he can short that in future or forex market.


Advance prices and going long, and decline prices and going short, are also sometimes referred to as being bullish in market and bearish in market.


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Posted on: 03-Jan-2017 | Posted by: NIFM | Comment('0')
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