Answer: being “long” means you already bought it (and haven’t sold it). Being “short” means you already sold it (but haven’t yet bought it). Being short is uncommon, while being long is extremely common.
When you’re long, you want the stock to rise (because you own it). When you’re short, you want the stock to fall because you owe someone the shares (and legally must buy them later at whatever price you get).
An ETF that’s advertised as “3x long” is expecting a daily performance that’s about 3x that of a stock or index. So if the S&P goes up around 1%, a 3x long S&P etf will go up around 3%, and a 3x short S&P etf will go down 3% – however that’s a simplification and there are hidden reasons why this has added risk.
Latest Answers