What is a “Long” position in stocks and shares and what’s the difference between buying a long position and just buying a normal stock? Is it the opposite of a “short” position?

Question

I’m seeing alot of “3x long graniteshares” on trading 212 and not sure what it is. I know when you buy a “short” position you’re banking on the price declining. Is a “long” position the opposite? Thanks!

In: 1

Answer 1

You buy any stock, you own shares, you have a position, you are long. You hope what you own increases in value. You sell those shares and you are out of the market. You closed your position. You are at zero.

You sell shares you don’t own, you owe shares, you have a position, you are short. You hope what you owe goes down in value so you can buy shares and repay what you owe. You buy shares to cover your short or close the position. Once closed you’re at zero.

3x funds borrow money to buy “extra” shares. Instead of taking $100 and buying one share at $100 they borrow an additional $200 and buy three shares. This amplifies gains and losses. Borrowing in this way is also called using leverage.