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A Beginner's Guide to Understanding Long and Short Contract Operations

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AI-generated summary
The document explains the core principles of short selling (做空) and long buying (做多) in trading. 1. **Short Selling Mechanism**: - **Bearish Outlook**: Predicting a market price drop. - **Short Selling**: Selling borrowed assets based on this prediction, typically through futures or contracts. - **Example**: An investor borrows a token, sells it at a high price, and buys it back at a lower price to profit from the difference. However, if the price rises instead, they risk losing their investment. 2. **Long Buying Strategy**: - **Bullish Outlook**: Anticipating a price increase. - **Long Buying**: Profiting by buying low and selling high, mainly in the spot market. - **Example**: Buying a token at a lower price and selling it at a higher price for profit. **Key Points**: - Long and short positions represent market participants' expectations and form the basis of market dynamics. **Summary Table**: | Concept | Operation Logic | Profit Condition | Typical Scenario | |---------|------------------------|------------------|-------------------| | Long | Buy first, sell later | Price rises | Spot buying | | Short | Sell first, buy later | Price drops | Contract trading | Additionally, the document provides links to trading tools and resources, as well as popular searches related to cryptocurrency trading.

Today, some friends have inquired about basic questions: What are the core principles of short selling and going long? This illustration is made to help everyone understand.

1. Short Selling and Short Mechanism#

Short Selling: Predicting that market prices will fall
Short: Selling behavior based on the short judgment (short selling cannot be done directly in the spot market, it must be realized through futures/contracts)

Short Position Analysis
When investors believe the current coin price is overvalued and predict it will fall in the future, they adopt a "sell first, buy later" strategy:

  1. Mortgage margin to borrow tokens (e.g., mortgage 2 yuan to borrow 1 token worth 10 yuan)
  2. Immediately sell the borrowed tokens at the market price of 10 yuan
  3. Wait for the coin price to drop to 5 yuan, then buy back the tokens for 5 yuan to return
  4. Net profit of 5 yuan difference (interest on the loan must be deducted)

⚠️ Risk Warning: If the coin price rises in the opposite direction, the margin may be forcibly liquidated (liquidation), resulting in a total loss of principal.

2. Bullish and Long Strategies#

Bullish: Predicting that market prices will rise
Long: Trading behavior that profits from "buying low and selling high" (the main profit method in the spot market)

Long Position Example
Taking SOL as an example:

  1. Buy and hold when the current price is 140 U
  2. Sell when the price rises to 280 U
  3. Achieve a profit of 140 U price difference

📌 Key Points:

  • Bulls/Bears represent the expected direction of market participants
  • The two form the basic logic of the market's two-way game

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Core Summary Table#

ConceptOperation LogicProfit ConditionTypical Scenario
LongBuy first, sell laterPrice risesSpot buying
ShortSell first, buy later (borrowed tokens)Price fallsContract trading

@Uncomprehending sol Original

Exclusive Benefits for This Month#

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🔥 On-chain Mining Tool Library#

1️⃣ Axiom Smart Sniper: https://axiom.trade
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Further Reading#

2025 Top Ten Digital Currency Exchanges in China - Authoritative Ranking
Wealth Roller Coaster in the Crypto World: A True Experience from Millions in Profit to Hundreds of Thousands in Debt

Popular Searches TOP10#

Bitcoin Purchase Guide | Contract Trading Principles | Exchange Registration Tutorial
OKX Recharge Strategy | Binance APP Download | Web3 Airdrop Strategy
DEFI Mining Tutorial | NFT Investment Guide | Leverage Trading Risks | Asset Allocation Plan

Data Source: btc8848.com & heiyetouzi.xyz

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