What do the terms Short Position and Long Position mean?
A long position is when you purchase something in the belief that the share will move upwards. So you take a LONG position on it i.e. buy it with a view to selling it at a higher price later for a profit. A short position is the opposite but the intricacies are a bit harder to explain. Basically you take a short position if you believe the price of a share, commodity or index will decrease or go down. You then take a SHORT position on it i.e. sell it with a view to buying it at a lower price later for a gain. In other words here you are effectively mimicking the act of selling securities you do not own in the hope of a fall in price which can later be closed at a profit by buying the shares back at the lower price. Shorting (‘shorting’ is also explained more fully in this section – ‘What is Shorting?’) as a speculative tool is when you have purchased a future or derivative that allows you to benefit from a share falling, or if you borrow shares and then sell them to benefit from a fall
