Long Position
A long position is a trade that benefits if the price of an asset rises.
✦ Key Insight
Going long is one of the most basic trading concepts. In spot markets, buying an asset is effectively a long position. In derivatives markets, traders can also go long without owning the underlying asset.
✕ Common Misconceptions
Assuming long positions always work in bull markets
Using excessive leverage
Entering after a large rally due to FOMO
Ignoring stop-loss levels
Forgetting funding costs on perpetuals
Detailed Explanation
How It Works
A trader opens a long position at an entry price.
If the asset rises above the entry price, the position generates profit before fees. If the asset falls, the position produces a loss.
With leverage, both gains and losses are amplified.
FAQs
Can I go long without leverage?
Yes.
Is buying spot crypto the same as going long?
Economically, yes, although spot ownership differs from derivatives exposure.
Can a long lose more than the initial margin?
Depending on the platform and product, losses can be substantial. Risk rules vary.