BU283 Chapter Notes - Chapter 8: Initial Public Offering, Market Price, Financial Statement
Document Summary
In a long position for a share, bond, commodity, or currency, the investor owns the security. In a long position, the investor first purchases the security and then sells the security. This is the most common approach to investing in securities. You take a long position when you expect an increase in the asset price long positions are profitable if you buy at a low price and sell at a high price (buy low, sell high) A short position is the reverse of the normal buy/sell sequence in a short position, the investor first sells the asset, and then buys it back later, hopefully at a lower price. A short position is initiated in the anticipation of a decrease in the asset price. Like a long position, a short position is profitable only if you buy low and sell high.
