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Futures and Options: Going Long and Short terminology

Posted By On 8/27/2008 03:05:00 PM Under
1. Going long mean one is buying stocks or assets and going short means that one is selling the stocks or related assets. This terminology is used in Futures and options generally.One can go short by buying a put option, selling a call option or going forward in futures contract to benefit from decline in prices.

2. If you do not hold the delivery and short sell and do not hedge the position in options, than the same is naked short selling as one is vulnerable.

3. Short signals provide a number of cues to long traders like one can close the open positions and same can be interpreted as per the below given terminology.
(a) Entry = Open a long or short position.
(b) Exit = Quit a long or short position.
(c)Take profits = Reduce a long or short position.

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