What is Long and Short Position in the Stock Market?

In the Indian stock market, traders and investors often talk about "long" and "short" positions. These are just two ways of making money, depending on whether you think a stock will go up or down. A long position means you buy a stock hoping the price will go up. A short position means you sell a stock, hoping the price will go down, even if you don’t actually own it. Sounds confusing? Don’t worry, here we will understand what Long and Short Positions are in the Stock Market.

What is a Long Position?

A long position means you buy a stock and wait for its price to go up. If it does, you sell it at a higher price and make a profit. Simple logic: Buy low, sell high.

For example, let's say today dosas cost ₹30 each.

You buy 5 of them.
Then tomorrow, the price rises to ₹ 40.
You sell all 5 for ₹200 (₹40 × 5).
You spent ₹150 (₹30 × 5).
Your profit = ₹50.

This is how a long position works, just like buying dosas cheap and selling them when the price goes up.

Let's take a real indian stock example, so you buy 50 shares of Infosys at ₹1,400 each.

After 2 weeks, Infosys reaches ₹1,600.
You sold all 50 shares for ₹80,000,
And had spent ₹70,000.
Now your profit = ₹10,000.

This is called going long. You are bullish, meaning you believe the stock’s price will increase.

What is Short Position?

A short position means you sell a stock without owning it, expecting the price to fall. Later, you buy it back at a lower price and keep the difference as profit. Imagine it as Sell high, buy low, but in reverse order.

For example, let's say today you borrow 5 dosas from a friend and sell them today at ₹30 each.

You get ₹150 (₹30 × 5).
The next day, the dosa price drops to ₹20.
You buy back 5 dosas for ₹100 and return them to your friend.
Your profit = ₹50.

You didn’t own the dosas. You sold first, then bought later when prices fell. That’s exactly how short selling works.

Let's take a real indian stock example, so you short 100 shares of Zomato at ₹140.

You receive ₹14,000.
After a few days, Zomato drops to ₹120.
You buy back those 100 shares for ₹12,000.
Your profit = ₹2,000.

This is a short position, used when you're bearish, meaning you expect the stock price to go down.

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Long Position vs. Short Position

SNo.	Long Position	Short Position
1	The investor buys and owns the stock.	The investor sells the stock that he doesn’t own.
2	When the stock price increases, the investor makes a profit.	Here, when the stock price decreases then the investor makes a profit.
3	No need for a margin account in case of a long position.	Here margin account is necessary for the investor.
4	e.g., When an investor buys 100 shares of a company, then the investors or the public call it 100 long shares.	e.g. When an investor sells 100 shares of a company, then the investors or the people call it 100 short shares.
5	In another way long position is Buy Low Sell High	In case of short, it is Sell High Buy Low

Conclusion

In conclusion, to sum it up: Long Position = Buy first, sell later. Make money if the stock goes up, or Short Position = Sell first, buy later. Make money if the stock goes down. Start simple. Use long positions to learn. If you want to try shorting, learn, practice, and always manage your risk. In the Indian stock market, both can earn money, but only if used wisely.