The term “LONG” simply means that you are looking to buy a stock at a low price and sell it at a higher price for a profit. For example, let’s say you buy 100 shares of Apple at $135 per share. You decide to sell those 100 shares at $136.

This means you made $1.00 per share on this trade. So $1.00 x 100 shares= $100 profit.

So the goal is to BUY LOW & SELL HIGH.

 

The term “SHORT” means that you are looking to make money as the price of the stock declines.

When you short, you SELL the shares (which are borrowed) and then buy back shares at a lower price in order to make a profit. The term “short” is synonymous with “short selling”.

So when you are short selling the goal is to SELL HIGH & BUY LOW.

Below is a candlestick stock chart which displays where you could go long and where you could short in order to make a profit.