Going "short" and "long"?

[Fishbulb]

I feel a little embarrased asking, but it's time I came out with this. I know I should know, but could someone please explain what it means to "go short" and also "go long" in relation to buying stock?

Thanks in advance

 

[wtang89]

Re: Very basic question here

I feel a little embarrased asking, but it's time I came out with this. I know I should know, but could someone please explain what it means to "go short" and also "go long" in relation to buying stock?

Thanks in advance

Hey fish,

Going long means you are buying the stock in anticipation of a rise in the price of the stock and hence profit from it. Going Short is simply the opposite, selling stock you dont own and thus if the price of the stock drops, you can buy it back at a lower cost and hence profit. Hope this clears it up for you

 

[Fishbulb]

Re: Very basic question here

Hey fish,

Going long means you are buying the stock in anticipation of a rise in the price of the stock and hence profit from it. Going Short is simply the opposite, selling stock you dont own and thus if the price of the stock drops, you can buy it back at a lower cost and hence profit. Hope this clears it up for you

Thanks

One more thing though if you wouldn't mind? How can you sell stock you don't own? Are we talking options, warrants here?

 

[Mr J]

You borrow the stock before you sell it. Some brokers provide this service. Going long and short relates to all instruments, not just stocks.

 

[Fishbulb]

You borrow the stock before you sell it. Some brokers provide this service. Going long and short relates to all instruments, not just stocks.

Cool....thanks. Yep, I finally understand this. Very much appreciated....it was bugging me for ages.