## Long and Short are - Understanding Basic Trading Orders

In the asset trading industry, the terms Long and Short are fundamental concepts that every trader must learn. Both orders allow you to profit regardless of which direction the market moves. Let’s study these orders in detail.

## Short is - Selling first and buying back later

**Short Position** means that a trader places an order to sell an asset before the price drops, expecting the price to decline in the future. When the price falls as anticipated, the trader buys back the asset at a lower price. The difference in price becomes their profit.

Short is a strategy used when you believe the market is entering a downward phase. You don’t need to wait for the price to rise to make a profit; you can also profit from a decrease in price.

**Example of Short Selling:** Suppose a trader borrows 100 shares of ORANGE from a broker and sells them in the market at $350 per share, receiving $35,000 immediately. Later, rumors suggest that the exporting country for ORANGE’s raw materials will suspend exports, causing the stock price to drop to $300 per share. The trader then buys back 100 shares at $300, spending $30,000, and returns the shares to the broker. The final profit is $5,000.

## Long Position - Buy first and sell when the price is high

**Long Position** involves placing a buy order for an asset when you expect the price to increase. When the price rises as predicted, you sell the asset and realize a profit from the price difference.

This is the most traditional way to profit from trading — buy low and sell high.

**Example of Long Position:** Tim hears that the 2020 earnings of PEAR are better than the previous year, so he believes the stock price will rise. Tim buys 100 PEAR shares at $350 each, spending $35,000. When other investors get the same news, the PEAR stock price rises to $400 per share. Tim then sells 100 shares for $40,000, making a profit of $5,000 from closing the position.

## Long and Short differ from other tools

Long and Short orders are not available for all financial instruments. Derivatives (Derivatives) such as Futures, Options, CFDs, and contracts traded on other markets support both orders.

Investors should check the platform’s criteria to see if Short orders are permitted, as not all asset types allow this method.

## When to use Long and when to use Short

**Use Long when:**
- The market is trending upward
- You expect the price to increase
- Positive data appears in the market

**Use Short when:**
- The market is trending downward
- You expect the price to decrease
- Negative data may pressure the price

Short provides traders with the option to profit from both upward and downward market movements, offering greater flexibility in risk management and portfolio management.