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What is short position?

Also known as: Going short, Shorting

Definition

A short position profits when the price of the asset falls.

In crypto, shorting is usually done with perpetual futures or margin borrowing. Because price can in theory rise without limit, a short needs a hard stop loss and a sized position even more than a long does.

Shorts are used to profit from a downturn or to hedge existing long holdings, so that a falling market reduces rather than multiplies the portfolio's losses.

Related terms

General education only. Not financial advice.