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Short selling
Short selling is selling an asset you do not own, usually borrowed, hoping to buy it back later at a lower price. If the price falls, the short seller keeps the difference; if it rises, they lose, and there is no ceiling on how high a price can go.
What it means for you. A short position's possible loss is unlimited, because a price can keep rising. You pay interest or fees on what you borrow for as long as the position is open, and a sharp rise can bring a margin call or a forced buy-back at the worst moment.
Sources: SEC Investor Bulletin: An Introduction to Short Sales, CFTC Glossary, FINRA: Know What Triggers a Margin Call · checked 4 October 2026
Long position
A long position means owning an asset, or holding a contract, that gains value when the price rises. Buying a coin and holding it is the simplest long position; buying a futures contract or a call option is a long position too.
What it means for you. If you are long, a fall in price is your loss. Bought outright with your own money, the loss stops at what you paid. Held with borrowed money or through futures, a fall can trigger a margin call or a forced sale, and the loss can exceed your deposit.
Sources: Investor.gov: Stock Purchases and Sales: Long and Short, CFTC Glossary, CFTC: Commitments of Traders explanatory notes · checked 4 October 2026