You can trade both bullish and bearish with Long and Short orders

Today, let's talk about the fundamental orders in derivatives trading - Long Position and Short Position. These tools help us profit whether the market goes up or down.

First, you need to understand that Long and Short are commands that tell you what to do with the asset you're trading. A Long order means placing a buy order, expecting the price to go up. Then, you close the position by selling to profit from the price difference. For example, if we Long an asset at 41 baht and the price rises to 42 baht, we close the position and make a profit of 1 baht. But if the price drops instead, we will incur a loss.

A Short order means selling the asset first, expecting the price to fall. Then, we buy back at a lower price to close the position and make a profit. For example, if we Short at 41 baht and the price drops to 40 baht, we buy back and earn a profit of 1 baht. But if the price rises instead, we will incur a loss.

The difference is that Long is used when we expect the market to rise, while Short is used when we expect it to fall. However, not all instruments support Short - it is only available with derivatives like CFDs and other tools.

Let's look at real examples. Suppose Tim hears that PEAR company has good earnings. He thinks the stock price will go up, so he buys 100 shares at 350 dollars (a Long position). Later, the stock price rises to 400 dollars. He sells and makes a profit of 5,000 dollars.

Another example: Tim hears that ORANGE company might face supply issues. He believes the stock price will fall, so he decides to Short - borrowing shares and selling at 350 dollars, earning 35,000 dollars. Later, the stock drops to 300 dollars. He buys back 100 shares for 30,000 dollars, closes the position, and makes a profit of 5,000 dollars.

The good thing is that nowadays, Short selling stocks has become easier through tools like CFDs, which offer convenient trading steps. We can profit from both rising and falling markets, using less capital but leveraging to aim for higher gains.

An important point is understanding the risks - both Long and Short can lead to losses if our predictions are wrong. Therefore, risk management and thorough market research are essential.