Is there a chance of making a profit in a falling market? Understand long and short positions in the market


Just like in the stock market, people buy stocks at low prices and sell them at high prices and make a profit, similarly, profits can be made by selling stocks on the stock market at high prices and buying them more late. Low price. There are two types of sentiments operating in the market. One is bullish and the other is bearish. If you buy shares of a company and expect the price to rise, this is called a long or long position. On the other hand, if you think the stock price will go down and you sell it before transferring it to your name, this is called a short position. You can deepen your knowledge on short and long positions at 5 paise. To find out more click on the 5Paisa link.

sense of long position
If there is an uptrend in the market and the trader thinks the stock price will go up, then he can hold it for a long time. Later, when the price rises, he can make a profit by selling the shares. For example, a share of ABC company is worth 100 rupees. If the trader thinks that over time it will rise to 120 rupees, he will buy that stock for 100 rupees and sell it back once the price reaches 120 rupees and make a profit. This means that the stock has been held longer in anticipation of a future price rise.

Meaning of short position
Going short or going short might seem a bit odd. Usually in trading all goods have to be bought before they are sold, but this does not happen in the stock market. given. , Later, he buys the same stock at a cheaper price and returns it to the broker. This is done because the trader believes that when the stock goes down, he can make a profit by buying it at a cheaper price.
The trading of long and short positions takes place mainly in the segment of derivatives or futures and options, where futures contracts for the delivery of shares are currently traded.

For more details, visit 5paisa ( on long and short positions.

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