Hello to my friends who love life and keep smiling despite all kinds of negativity. In this article, I will tell you about the "Short and Long Positions" that have been the main cause of the storyline that started with Gamestop and continued with Dogecoin and Bitcoin for the past two weeks. I will try to explain it as simply as possible. Let's learn together…
Short position is pricing an asset in such a way that its value will decrease. An investor borrowing from someone else and selling an asset that he does not already have.
The short position is taken with the expectation that the price will decrease. When an asset depreciates, you buy it at a lower price. The difference is your income. It is mostly used in derivatives markets.
A small example if not fully understood;
You have 2 Bitcoins in your hand. You think that Bitcoin will lose value in a short time. You have an expectation in this direction. You sold 1 bitcoin for $ 40,000 and you have $ 80,000. You started to wait and as you guessed, Bitcoin depreciated. It is now $ 38,000 for 1 Bitcoin. When your expectation of decline is over, you get 2 Bitcoins, in return you pay $ 76,000. You have earned $ 4,000 with this Short Position transaction. You can do this action without owning bitcoin. You can borrow it. There are derivative exchanges for this.
The long position is the opposite of what I described above. That is, you take action by thinking the Being will rise.
In finishing…
As Elon Musk said above, the assets of others are to gain by acting as if they are owners. Normal investors, unaware of these, may lose their assets. Something wrong here? Crankcases that do not have any assets add wealth to our wealth on our back.
That's why organized communities rebel against this. Like bees destroying wasps to defend their nests ...
As I always said, listen to everyone, decide for yourself ...
I'm looking forward to your comments. Thanks to your comments, we can shape my next articles together. Let's stay in touch… Take care of yourself so that you and the people around you are happy…
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