Stock Market Investors » Glossary of Stock Terms » What is Long-Short Investing?

What is Long-Short Investing?

The long-short investing strategy involves buying shares of stock in one company and shorting others. This strategy is often implemented by hedge funds. They short a company that is doing the worst and buy shares in a company that is doing well.

The meaning behind long is closely related with buying. For example, when you say go long 200 shares of Microsoft, you mean that you want to purchase shares of Microsoft. On the other hand, the meaning behind short is closely related to selling. For example, when you say short 200 shares of Microsoft, you mean that you want to sell the shares you possess of Microsoft.

Other meanings of long and short are related with your position regarding a stock. The long position concerns the investor's ownership of securities. For example, if you state that you are long 200 Microsoft, then this means that you are the owner of these shares. On the other hand, short position occurs when the investor sells stocks which are "borrowed" and s/he does not yet own. Generally, stock traders create a short position when they expect the price to go down.

To be a successful investor you need two main things - the knowledge and the right trading platform. For a trading platform we can recommend try you Zecco and TradeKing.
Zecco offers free stock trades, no account minimum, real time quotes, trading community, and is also insured and protected against loss by SIPC. Opening a Zecco account to benefit from $0 Stock/ETF trading is a smart idea. Free stock trades allow you to preserve more of your wealth and save money, which you can invest instead of paying brokerage commissions.
TradeKing has been rated #1 Discount Broker by SmartMoney’s (the Wall Street Journal Magazine) annual US broker survey. It was also awarded the highest 4-star ranking in Barron's survey of Best Browser-Based Online Brokers. TradeKing platform features real-time portfolio information, advanced order entry, stock, option and mutual fund screeners, customized charting and alerts, volatility charts, a pricing probability calculator, free research and integrated news, and interactive educational information. Open a TradeKing account here

Article Tools
Rate this article : Low
  • Currently 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 High
Bookmark this page (CTRL+D) :
Email to a friend | Print this page | Link to this article | Digg this

THE CRISIS 101
TOP RATED
LAST ADDED
Click Here For The Wall Street Journal
30 Day Free MarketWatch - Technical Indicator

Related terms: long or short, long position, short position, long and short of it, long short strategy, long stock position, short stock position