What Does Going Long Mean?
Going long means buying a security in the belief that its value will rise over time. A trader who is ‘long’ holds a position that gains value as the price increases and loses value as the price falls. It is one of the two basic directions a position can take, the other being going short.
How a Long Position Works
When a trader goes long, they open a buy position at the current price and aim to close it later at a higher price. The difference between the entry and exit price, minus any costs, represents the outcome of the trade. The position can be held for minutes or for months, depending on the trader’s approach.
Going Long Versus Going Short
| Aspect |
Going Long |
Going Short |
| Market view |
Expects price to rise |
Expects price to fall |
| Opening action |
Buy first |
Sell first |
| Gains when |
Price increases |
Price decreases |
| Loses when |
Price decreases |
Price increases |
Where Going Long Is Used
Going long applies across shares, forex, indices, commodities and other markets. In leveraged trading such as CFDs, a long position can be opened without owning the underlying asset, though leverage increases both potential gains and potential losses.
Points to Weigh Before Going Long
A long position is exposed to falling prices, and losses grow as the market moves lower. When leverage is involved, those losses can exceed the initial deposit. Holding costs may also apply the longer a position stays open. A rising market is never assured, so a long position reflects a view rather than a certainty.
The Role of Long Positions
Going long is the most familiar way to participate in a market, expressing a straightforward view that prices will climb. Understanding how a long position gains and loses value is a foundation for reading risk and reward. At VT Markets, traders can take long positions across a range of instruments as part of a considered strategy.
Risk Warning:Trading CFDs involves significant risk and may not be suitable for all investors. Losses can exceed your initial deposit. Please ensure you fully understand the risks involved before trading.
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