Long and short positions

Two Directions, One Mechanic

A long position profits when the price of an asset rises. You buy now, hold, and sell later at a higher price. This is the intuitive direction—what most people mean when they say they own a coin. Going long requires nothing exotic: simply buying spot Bitcoin and holding it is a long position by definition.

A short position profits when the price falls. The classic mechanic is to borrow tokens from someone else, sell them now at the current price, then buy them back later at a lower price to return the loan—pocketing the difference. In crypto, shorts are usually expressed through derivatives like perpetual futures or options rather than via literal borrowing. The exchange handles the mechanics; you just click short and post collateral.

Shorts carry asymmetric risk. A long can only lose 100% of the position—the price drops to zero. A short can theoretically lose unlimited amounts if the price keeps rising. This is why shorts at high leverage are often liquidated in sharp rallies. The visible imbalance between longs and shorts—sometimes published as a long/short ratio—gives traders a quick read on crowded positioning and potential squeeze setups.