Quick Comparison: Long vs Short Trading

Feature Long Short
Bet Price goes up Price goes down
Profit When price rises When price falls
Risk Limited to investment Theoretically unlimited
Method Buy low, sell high Sell high, buy back low

What is Long?

Going long means buying an asset hoping it goes up. This is what most people do — buy BTC at $50K, sell at $100K, profit. Simple and intuitive. Your maximum loss is your investment.

Long positions can be held indefinitely without extra costs (in spot). You own the asset and can wait as long as needed for your thesis to play out. 99% of retail investors should stick to long-only strategies.

What is Short Trading?

Shorting means selling an asset you don't own, hoping to buy it back cheaper. If BTC is $100K and you think it's going to $80K, you short. Borrow, sell, buy back cheaper, profit the difference.

The risk: unlimited. If you short BTC at $100K and it goes to $500K, you lose 5x your position. Shorts also require margin and incur funding costs. Only short if you fully understand the mechanics and risks.

Key Differences

  • Direction: Long = bullish, Short = bearish
  • Max Loss: Long = 100%, Short = unlimited
  • Max Gain: Long = unlimited, Short = 100%
  • Costs: Long spot = none, Short = margin + funding
  • Difficulty: Shorting is harder — markets trend up long-term
  • Timing: Shorts require precise timing, longs can wait

Which Should You Choose?

Go Long if: You're bullish on an asset and want simple exposure. This is the default strategy for most investors. Time is on your side.

Go Short if: You're convinced something is overvalued, understand margin, and have strict risk management. Most people shouldn't short — ever.

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