Long
If you’re “long” on a stock, it means you own it because you expect it to increase in value so you can profit. As an example, suppose you go long 100 shares of ZYZY stock at $10.00 per share, or $1,000 total. Then you sell the stock for $10.40 per share, collecting $1,040 and making a $40 profit. In this case your long position would have been profitable. If the price dropped to $9.50, your long position would not have been profitable because you’d lose $50.
Short and Shorting
Traders can also sell at a high price and buy back at a lower price, which is called being short, shorting, or short selling. This is when you try to profit from a stock losing value. Essentially, you borrow the asset, sell it, then buying it back cheaper so you earn a profit. For example, if you short 100 shares of ZYZY stock at $10.00, you’ll first sell them and receive $1,000 into your trading account. But your account will show negative 100 shares. The negative share balance must be brought back to zero at some point by buying back the 100 shares. So, later, after the stock price has dropped, you buy 100 shares back for $9.60 per share at a total cost of $960. Since you initially received $1,000, buying the shares back for only $960 gives you a $40 profit. However, if the price instead increased to $10.50, you would lose $50 ($0.50 extra cost x 100 shares).
Bull or Bullish
Being long, or buying, is a bullish action. Essentially, it’s having a belief that an asset will rise in value. To say a trader is “bullish on gold,” for example, means that the trader believes the price of gold will rise. Being a bull can represent an opinion or action. Someone who’s bullish may go long on the assets they’re bullish on. Alternately, they may just have an opinion that the price will rise, but have decided against making any trades based on that opinion. Bullish stances can be extremely specific opinions about a single stock, or they can be broad opinions about the overall market. A bull market is when an investment’s price is rising—called an uptrend—typically over a sustained period, such as months or years.
Bear or Bearish
Being bearish is the opposite of being bullish. It is the belief that the price of an asset will fall. To say a trader is “bearish on stocks” means they believe the price of stocks will decline in value. A person may hold bearish beliefs about a specific company or about a broad range of assets. A trader with bearish beliefs may choose to act on them or not. If the trader does act, they may sell shares they currently own, or they may go short. A bear market occurs when an investment’s price is falling—called a downtrend—typically over a sustained period such as months or years. Acting on a bearish or bullish opinion should be based on a well-defined trading strategy.
