What Do Long, Short, Bullish and Bearish Mean?

Learn how these terms apply to trading

Trading has a language of its own, and if you're starting out long, short, bullish and bearish are trading terms you'll hear frequently. They're important words for effectively communicating with other traders. Understanding these terms also means you're potentially on your way to making money whether the market rises or falls. 

Going Long or "Long"

Going Long trading definition - expecting prices to rise
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Long is like "buy." If you're "going long" in a stock it means you're buying it. If you're already long, then you bought the stock and now own it. 

In trading, you buy or go long something if you believe its value will increase. This way, you can sell it for a higher value than you paid and reap a profit. 

Assume Suzy goes long 100 shares of ZYZY stock at $10.00, costing her $1,000 (not including commissions). Several hours later she sells the stock for $10.40 per share, collecting $1,040 and making a $40 profit.  If the price falls, she will be losing money. If the price moves down to $9.50, she will be showing a loss of $50 ($0.50 x 100 shares).

Bull or Bullish

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Bulls attacks upwards, representing buyers and those who believe a price will rise. Getty Images

If being long or buying are actions related to a belief that an asset will rise in value, then being bullish is the belief. To say "I'm bullish gold" means that I believe the price of gold will rise.

Being a bull can represent an opinion/belief, or an action. Someone who's bullish may actually go long the assets they're bullish in, or they may simply have an opinion that the price will rise, but not actually make a trade based on that opinion.

The term "bull" or "bullish" comes from the bull, who strikes upwards with its horns, thus pushing prices higher. 

A bull market is when an asset's price is rising--called an uptrend--typically over a sustained period time (relative to the trader's time frame).

Bullish/bull and long are sometimes used interchangeably. For example, instead of saying "I am long" a trader may simply say "I am bullish". Both indicate that they believe prices will rise.

Going Short, Short and Shorting

Short Trading Definition - when prices fall
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Most people think of trading as "buy low, sell high." Buy at a low price in the hopes of selling at a higher price later.

You can also "sell high, buy low." Being short, or shorting, is when you sell first in the hopes of being able to buy the asset back at a lower price later. 

This is a strange concept for many people to grasp, but in the financial markets you can buy then sell, or sell then buy. If you've done the latter, then you're short the asset. 

You'll also hear the term short-selling. This is the same as shorting. 

In the futures and forex market you can short any time you wish. In the stock market there are more restrictions on what stocks can be shorted and when. When you hear someone say they are shorting something, it means they believe the price will go down.

Assume Suzy shorts 100 shares of ZYZYZ stock at $10.00. Since she sold first she'll receive $1,000 into her trading account, but her account will show -100 shares. The negative share balance must be brought back to zero at some point by buying back the 100 shares. An hour later she buys the stock back at a price of $9.60 per share,for a cost of $960. Since she initially received $1,000, buying the shares back for only $960 gives her a $40 profit (not including commissions). If the price rises, she will be losing money. If the price moves up to $10.50, she will be showing a loss of $50 ($0.50 x 100 shares).

Bear or Bearish

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Bears attacks downwards, representing sellers and those who believe a price will fall. Getty Images

If going short is an action resulting from a belief an asset will drop in value, then being bearish is the belief. A bearish person believes an asset's price will fall; they may act on this belief or not. Being short and bearish essentially mean the same thing.

If the trader does act, they may simply sell shares they own (sell shares they currently own), or they may go short. Being bearish doesn't necessarily mean the person will or wants to go short an asset. 

To say "I'm bearish on stocks" means I believe the price of stocks will decline in value. 

The term "bear" or "bearish" comes from the bear, who strikes downward with its paws, thus pushing prices down. 

Acting on a bearish or bullish opinion should only be done based on a well defined and tested trading strategy.

bear market is when an asset's price is falling--called a downtrend--typically over a sustained period time (relative to the trader's time frame).

See the day trading glossary for more trading terms.

Long, Short, Bullish and Bearish

Trading "lingo" takes a while to learn. Every trader should understand these terms since they're used frequently in financial news, trading articles and in the papers. Long and bullish refer to buying an asset, and the belief that the asset will rise in value. Being short refers to selling first, in the hopes to buy back the asset at a lower price. Bearishness is a belief that a price will fall. Long, short, bullish and bearish are terms used in all markets and on all time frames, regardless of whether you're day trading or investing, or trading soybeans or currencies.