Long and short
Long means you bought and gain when the price rises; short means you sold and gain when it falls.
A short position is opened by selling something you do not hold, and closed by buying it back.
Both directions carry the same risks. Nothing about either one makes a position more likely to work.
How each one opens and closes
Going long is pressing Buy. The position stays open until you sell the same amount back, and the result is the closing price minus the opening price.
Going short is pressing Sell without holding anything first. The position stays open until you buy the same amount back, and the result is the opening price minus the closing price. On a broker's platform both are one click; the broker handles the borrowing behind a short.
The same move, both ways, on gold
Take 0.10 lot of gold where one lot is 100 ounces, so 0.10 lot is 10 ounces and every dollar gold moves is 10 dollars on the position.
| Long (bought) | Short (sold) | |
|---|---|---|
| Opened at | 4,300.00 | 4,300.00 |
| Gold rises to 4,320.00 | +20 dollars x 10 oz = +200 dollars | -20 dollars x 10 oz = -200 dollars |
| Gold falls to 4,280.00 | -20 dollars x 10 oz = -200 dollars | +20 dollars x 10 oz = +200 dollars |
What each one costs
Both pay the spread: a long opens at the ask and closes at the bid, a short opens at the bid and closes at the ask.
Held past the broker's daily rollover, either direction can be charged or paid a swap, and the swap for a long and a short on the same symbol is usually different. The rates are in the symbol specification.
Questions people ask
What does long mean in trading?
Being long means you bought, so the position gains if the price rises and loses if it falls.
What does short mean in trading?
Being short means you sold first, so the position gains if the price falls and loses if it rises. You close it by buying back.
Can you short gold?
Yes. On a broker's XAUUSD you press Sell to open a short and Buy to close it, the same way as any other symbol.
Is shorting riskier than buying?
Both lose the same amount for the same move against them. The difference is that a falling price cannot go below zero, while a rising price has no ceiling, which is why a stop loss matters either way.
Source: The gold example uses round prices chosen to make the arithmetic easy. It is not a record of real trades, and spread and swap are left out of it.
Also called: buy and sell, long and short meaning, what does long and short mean in trading, buy long sell short, going long, going short
Related terms
A definition, not financial advice. Trading carries a risk of loss.