What exactly is short? This topic is more complicated than it seems. I believe many traders still do not fully understand the difference between long and short positions.

Simply put, a long position is buying first, expecting the price to go up, while a short position is selling first, expecting the price to go down. But this is not as easy as regular trading in the stock market.

When we open a long at 41 baht, we buy that asset. If the price rises to 42 baht, we close the position by selling, making a profit of 1 baht. Easy, right? But if the price drops to 40 baht, we will incur a loss.

This is where the concept of short comes in. It’s doing the opposite. We open a short at 41 baht, similar to lending out money. When the price drops to 40 baht, we buy back, making a profit of 1 baht as well.

But what is short? It’s important to understand that it only applies to certain derivative instruments, such as CFDs, derivatives contracts, or Tfex. Not all instruments support short selling.

Here’s a real example: Suppose Tim hears news that ORANGE company will face production issues. He thinks the stock will fall, so he decides to open a short at $350, selling 100 shares. When the price drops to $300, he buys back, making a profit of $5,000.

Conversely, if the price rises to $400 instead, he will incur a loss because he sold too low and has to buy back at a higher price.

Currently, CFD tools make short trading much easier. No need for complicated borrowing of shares anymore. Traders can profit from both rising and falling markets, using less capital, leverage, and achieving higher gains.

The key thing to remember is: what is short? It’s just a tool that allows us to profit from expecting prices to fall. But it carries the same risks as long positions—if your prediction is wrong, you can easily incur losses.