What Does It Mean To Go Long And Short In Crypto?
Going long and short are investment strategies where an investor in stocks or crypto anticipates market price movements. In a long position, the investor expects the price to rise, while in a short position, the investor expects the price to fall. Going long and short in crypto are therefore ways in which an investor tries to profit from price increases or decreases of Bitcoin, Ethereum, or other altcoins.
Go Back
đź•’ 9:41 PM
đź“… Nov 14, 2025
✍️ By chrison2
°Going long means buying crypto in anticipation of a price increase and selling later at a profit.
°Going short means speculating on a price decline by selling borrowed crypto and buying it back cheaper later.
°Long is more popular among beginners, while short is more complex and involves more risk.
°With leverage, you can open larger positions than your own capital, but it also increases the risk of loss or liquidation.
°A short squeeze occurs when many short positions are closed simultaneously, causing the price to rise rapidly.
°Tools to go long or short include spot trading, margin trading, futures, perpetuals, and options.
°Risk management is crucial: use a stop-loss, don’t trade with money you can’t afford to lose, and stick to a pre-set plan.
đź“ŤWhat tools can you use for long and short positions?
There are several ways to go long or short. Some methods are more complex and require more experience, while others are riskier and require more risk tolerance.
Spot trading: This is the classic way of buying and holding crypto on exchanges and brokers like Finst, where you can place market and limit orders. You can only take a long position with this method.
Margin trading: With margin trading, you borrow money or crypto to open larger positions. This allows for higher profits, but also increases the risk of larger losses if the price moves the wrong way. Your positions may be liquidated.
Futures: With futures or derivatives, you can enter a contract to buy or sell crypto on a specific date without owning the coin.
Perpetuals: A variant of futures but without an expiration date. You pay a funding rate to keep your positions open.
đź“ŤWhat are the risks of going long and short?
Due to the crypto market's volatility, trading with long and short positions can be even riskier.
Risk of liquidation: In margin trades, positions can be automatically closed if the price moves against you. You could lose your entire position.
Short squeeze: If many traders close their short positions simultaneously, the price can rise sharply and many short traders may lose their capital.
Unlimited loss: In a short position, you could theoretically lose unlimited amounts. For instance, if the price keeps rising and you wait for a drop to buy back your position. If it keeps rising, your loss increases indefinitely.
FOMO or emotional trading: If you trade without a plan and act based on FOMO or emotion, you might make the wrong choices and lose money.
đź“ŤHow can you manage risks?
If you're aware of the risks, you can manage them with good risk management. Here are some tips:
Use a stop-loss: Automatically close your positions at a loss to prevent further loss.
Only trade with money you can afford to lose.
Limit the use of leverage: Start with 2x or 3x, or even avoid leverage entirely to minimize risk.
Make a plan: Make sure you have a strategy outlining where you enter, exit, and take profits. Most importantly: stick to it.
Diversify: Don’t put all your money into one coin or trade.