What are 'long' and 'short' positions?
A long position, simply put, is betting on a price increase. You buy something, hoping its price will rise, and then sell it when it does to earn the difference. For example, if you spend $20,000 to buy 1 Bitcoin, thinking it will rise to $25,000. If it does rise, and you sell it, you can make a profit of $5,000 (not counting fees, etc.).
A short position, on the other hand, is betting on a price decrease. You borrow something from someone, sell it quickly, and then buy it back at a lower price to return it, earning the difference between the selling and buying prices. For instance, if you borrow 10 shares of a company's stock at $100 each and sell them for $1,000. If the stock price drops to $80, you can buy them back for $800 to return, keeping a profit of $200 (not counting fees, etc.).
Let's talk about the risks:
Long position: You can lose at most the money you invested. If the asset price drops to zero, you lose everything.
Short position: The risks of a short position are much greater, theoretically limitless. If the asset price skyrockets, the amount you could lose may exceed your initial investment.
Click on the avatar to see the homepage and follow me, a free communication community, where I share various potential coins daily, guiding you to invest in various hundred-fold coins, helping you make significant profits in this bull market.
