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!