Short Position
A bet that an asset's price will fall, made by selling borrowed coins to buy back cheaper.
Shorting profits from falling prices. You borrow a coin, sell it now, and aim to buy it back lower, returning it and keeping the difference. On most crypto exchanges this happens through derivatives rather than literal borrowing.
The risk is lopsided. A long can fall only to zero, but a short loses as the price rises, and price has no ceiling. A sudden rally forces shorts to buy back at any cost, a short squeeze that drives the price even higher. Shorting fights crypto's long-term uptrend, which makes timing everything.
Related terms
A bet that an asset's price will rise, profiting as it climbs and losing as it falls.
LeverageBorrowed money used to control a larger position than your own capital would allow, amplifying gains and losses.
BearishDescribes an expectation that a price will fall, or a position set up to gain when it does.
LiquidationThe forced closing of a leveraged position when losses drop its collateral below the required minimum.