Long position vs Short position
Look-alike pair
Full entries: Long position · Short position.
A long position and a short position are opposite directional bets: a long profits when the price rises, while a short profits when the price falls. That single difference in profit direction determines every other distinction between the two.
Side by side
| Long position | Short position | |
|---|---|---|
| Profit direction | Profits as the price of the instrument rises. | Profits as the price of the instrument falls. |
| Typical entry | Buy the instrument, or buy a contract to buy it later. | Sell borrowed shares or sell a contract to sell later. |
| Maximum loss | Limited to the amount paid, if the price goes to zero. | Theoretically unlimited, because price can rise without bound. |
| Field mark | Your account shows a positive quantity of the instrument. | Your account shows a negative quantity or a short indicator. |
| Costs and mechanics | Standard purchase; no borrow fee in most cases. | May involve stock borrow fees, margin interest, or a hard-to-borrow list; details vary by broker and country. |
| Regulatory treatment | Generally straightforward; no uptick rule for ordinary buys. | Often subject to short-sale restrictions such as uptick rules or locate requirements; these vary by regulator and market. |
Which word to use
Use long position when you own or have bought the instrument expecting a price rise, and short position when you have sold borrowed or derivative exposure expecting a price fall.
Family: XI · Look-alikes · Index A–Z