Glossary

Long position

A long position is a trade that gains value when the price of the asset rises and loses value when the price falls.

A long position profits from a price increase. In the spot market, buying a coin and holding it is a long position. In the derivatives market, a trader buys a futures or perpetual contract. The trader does not need to own the coin to hold a long contract.

A spot long can lose at most the amount paid. A leveraged long can be liquidated if the price falls to its liquidation level. In perpetual futures, a long trader also pays or receives the funding rate. When the rate is positive, the long side pays the short side.

Market data often shows the long and short share of open positions, or a long/short ratio. This ratio counts accounts or positions that a platform reports. It does not show the intent of every trader, because each long has a matching short on the other side of the trade. Read it with care.