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RK

meaning of basic terms

October 30th, 2001, 2:24 am

could anyone be bothered to clarify this for me?short/long position is defined in pwiqfwhat do going short/long short/long on put/call short sell (i think i've heard this one too) short/long putmean?thank you!
 
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Hamilton
Posts: 1
Joined: July 23rd, 2001, 6:25 pm

meaning of basic terms

October 30th, 2001, 3:32 am

Going long means buying more of something than you sold, for example in commodities you are long legume producer contracts if have more contracts to purchase these commodities than you have contracts to sell them...ie you have some contract inventory.conversely, I can be long IBM stock, which means I have more purchases of IBM stock than sales...I can be short, meaning I have sold more than I own, as long as the agreements to sell are in the future...this is selling short, and means that you are betting that the price will drop so that you can buy in the future at a lower price than you sold.This is generating profit as you've bought low and sold high, but in reverse order!
 
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Lennart
Posts: 4
Joined: August 15th, 2001, 11:26 pm

meaning of basic terms

October 31st, 2001, 2:07 pm

Language question: But where do these words come from? Why am I "long" if I have a positive position in some asset? And how about "short"?
 
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Aaron
Posts: 4
Joined: July 23rd, 2001, 3:46 pm

meaning of basic terms

October 31st, 2001, 8:14 pm

Language question: But where do these words come from? Why am I "long" if I have a positive position in some asset? And how about "short"? >>"Short" has long had the meaning of owing something but not having it (e.g. caught short, shortfall, short changed, short weight). It was adopted as a euphemism around 1840 in the US. "Selling short" sounds better than "selling something you don't own." A "long" position was then a natural retronym.