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/biz/ - Business & Finance

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49977679 No.49977679 [Reply] [Original]

What does short and long mean and why are they making me lose money?

>> No.49977690
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49977690

>>49977679
Short is your pp and long is my pp

>> No.49977723

>>49977679
Short means the investment is going to come up short with less money than you started with

Long means it's going to be a long tune before you can make back all the money you lost

>> No.49977807
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49977807

>>49977690
based, heres something to make your pp long

>> No.49977845

>>49977807
Wtf source, name, what the fuck

>> No.49977875

>>49977679
>Long
Line go up, based, bullchads
>Sh*rt
Line go down, cringe and gay, bobo faggots, (never actually works because crypto and stocks only go up)

>> No.49977911

>>49977679
In all seriousness though, google is your friend. Shorting you borrow coins or shares from someone through a middleman and sell them immediately, with the promise that you will buy them back and return them later. If price go up, you lost money because you have to buy back the same amount of shares at a higher price to return them. Longing can simply mean buying, but longing usually means you’ve used leverage in your purchase. That means you borrow more shares than you can actually afford, and promise to sell them later. For longing and shorting, you must provide some amount of collateral (money), and “liquidation” refers to the point when the value of your collateral falls below the current market value of the short/long position you’ve entered.

Eg:
>current price $1
>you borrow 10 shares and provide $1 collateral
>if you shorted, then you will be liquidated when the price hits $1.10, because the current value is $11, so you must pay the difference so that the lender does not incur any losses
>if you longed, then you will get liquidated at $0.90, because the value of the 10 shares will have dropped by the equivalent value of the collateral you provided, so you must sell the shares to again ensure the lender does not suffer losses on your behalf

Make sense?

>> No.49977947

>>49977911
Can you provide examples in which you make money out of both?

>> No.49978113

>>49977947
>price is $1
>borrow 10 shares for a short position with $1 collateral
>prices decreases to $0.90
>close short position; return 10 shares to seller for $9
>collect $2 total ($1 collateral + $10 borrowed - $9 current market value)

>price is $1
>borrow 10 shares for a long position
>price increases to $1.10
>close long position for $11 current market value
>net $1 profit

>> No.49978134

>>49977911
>google is your friend
What a disturbing thing to say, fed.

>> No.49978223

>>49978134
TRUST ZE GOOG