Investing Trading Day Trading Definitions of Long, Short, Bullish, and Bearish Understanding 4 Common Trading Terms By Cory Mitchell Cory Mitchell Facebook Twitter Cory Mitchell, Chartered Market Technician, is a day trading expert with over 10 years of experience writing on investing, trading, and day trading for publications including Investopedia, Forbes, and others. learn about our editorial policies Updated on June 21, 2022 Reviewed by Gordon Scott In This Article View All In This Article Long Short and Shorting Bull or Bullish Bear or Bearish Frequently Asked Questions Photo: The Balance / Lara Antal Every trader should understand what long, short, bullish, and bearish mean. These fundamental terms are used frequently in financial news, trading articles, market analysis, and financial conversations. Regardless of whether you're day trading, long-term investing, or simply joining a conversation, you can benefit from learning the definition of these terms. Key Takeaways When you are long a stock, you hold the stock because you expect it to increase in value.Shorting is selling borrowed shares of stock with the intention of buying the shares back later at a lower price. Being bullish means you are optimistic about an asset's future price.When you are bearish, you are pessimistic about an asset’s future price. Long If you're "long" on a stock, it means you own it because you expect it to increase in value so you can profit. As an example, suppose you go long 100 shares of ZYZY stock at $10.00 per share, or $1,000 total. Then you sell the stock for $10.40 per share, collecting $1,040 and making a $40 profit. In this case your long position would have been profitable. If the price dropped to $9.50, your long position would not have been profitable because you'd lose $50. Short and Shorting Traders can also sell at a high price and buy back at a lower price, which is called being short, shorting, or short selling. This is when you try to profit from a stock losing value. Essentially, you borrow the asset, sell it, then buying it back cheaper so you earn a profit. Note In the futures and forex market, you can short any time. In the stock market, there are more restrictions on which stocks can be shorted and when. No matter the market, if someone says they are shorting, they believe the price will go down. For example, if you short 100 shares of ZYZY stock at $10.00, you'll first sell them and receive $1,000 into your trading account. But your account will show negative 100 shares. The negative share balance must be brought back to zero at some point by buying back the 100 shares. So, later, after the stock price has dropped, you buy 100 shares back for $9.60 per share at a total cost of $960. Since you initially received $1,000, buying the shares back for only $960 gives you a $40 profit. However, if the price instead increased to $10.50, you would lose $50 ($0.50 extra cost x 100 shares). Bull or Bullish Being long, or buying, is a bullish action. Essentially, it's having a belief that an asset will rise in value. To say a trader is "bullish on gold," for example, means that the trader believes the price of gold will rise. Being a bull can represent an opinion or action. Someone who's bullish may go long on the assets they're bullish on. Alternately, they may just have an opinion that the price will rise, but have decided against making any trades based on that opinion. Bullish stances can be extremely specific opinions about a single stock, or they can be broad opinions about the overall market. Note "Bullish," "bull," and "long" are often used interchangeably. For example, a trader may say, "I am long on that stock" or "I am bullish on that stock." Both statements mean they believe prices will rise. A bull market is when an investment's price is rising—called an uptrend—typically over a sustained period, such as months or years. Bear or Bearish Being bearish is the opposite of being bullish. It is the belief that the price of an asset will fall. To say a trader is "bearish on stocks" means they believe the price of stocks will decline in value. A person may hold bearish beliefs about a specific company or about a broad range of assets. A trader with bearish beliefs may choose to act on them or not. If the trader does act, they may sell shares they currently own, or they may go short. A bear market occurs when an investment's price is falling—called a downtrend—typically over a sustained period such as months or years. Acting on a bearish or bullish opinion should be based on a well-defined trading strategy. Frequently Asked Questions What Is a Bullish Engulfing Pattern? A bullish engulfing pattern is when a white, engulfing candlestick follows a black candlestick. A candlestick is a price chart for securities that shows the high, low, opening, and closing prices for a specific period (usually one day). A black candlestick is when a security closes below the opening price and the price at which it previously closed. A white candlestick is when a security closes at a higher level than where it opened. It shows a bullish, or upward, trend. What Is a Bullish Reversal? A bullish reversal is when a security starts to trend upward when it was previously trending downward, or in a bearish direction. A reversal indicates a larger trend and is different from a pullback, which is a counter-move within a trend that doesn't change the overall trajectory of the trend. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. U.S. Securities and Exchange Commission. "Stock Purchases and Sales: Long and Short." Mario Singh. "17 Proven Currency Trading Strategies: How to Profit in the Forex Market." John Wiley & Sons, 2012. U.S. Securities and Exchange Commission. "SEC Approves Short Selling Restrictions." U.S. Securities and Exchange Commission. "Key Points About Regulation SHO." U.S. Securities and Exchange Commission. "Bull Market." U.S. Securities and Exchange Commission. "Bear Market."