Going long is buying. Going short is selling something you do not have, which raises an obvious question — and the answer is where the risk lives.

Two words that sound like jargon and describe something simple: which direction you are betting, and therefore what has to happen for you to make money. If the question underneath it — what trading actually is — is still open, start there.

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Long: the ordinary one

You buy at 68,000. If it goes to 75,000 you can sell for more than you paid. If it goes to 60,000 you are down. On spot, you own the coin throughout and nobody can take it from you — being down is a fact about the price, not an event that ends anything.

The worst case is bounded: the asset goes to zero and you lose what you put in. Not pleasant, but finite, and that boundary is the reason long positions are survivable in a way short ones are not.

Short: selling first

You expect the price to fall. So you sell now, at the high price, and buy back later at the low one — pocketing the difference. The obvious objection is that you cannot sell something you do not own, which is exactly right. There are two ways round it.

1. Borrow itYou borrow the coin from somebody, sell it at the market price, and later buy it back and return it. You keep the difference and you pay interest for the loan. If the price rose instead, you buy back higher and the loss is yours.
2. Use a contractYou enter an agreement whose value moves opposite to the price. No coin is borrowed and none changes hands — you post collateral and settle in cash. This is how most crypto shorting is actually done, through perpetual futures.

The asymmetry, stated plainly

A long can lose everything you put in. That is the floor, and it is reached only if the asset becomes worthless.

A short has no equivalent ceiling. A coin bought at 68,000 can fall to zero — a loss of 68,000 for the buyer. The same coin can rise to 200,000, or further, and every step of that rise is a loss for whoever is short. There is no price at which the market stops.

In practice you will not lose an unlimited amount, because the platform closes the position when your collateral runs out. That is not protection — it is the platform protecting itself. What it means for you is that a short is closed at the worst moment, by somebody else, whether or not the price would have come back.

Short squeeze

When a price rises, shorts start losing. Some are closed automatically as collateral runs out, and closing a short means buying. That buying pushes the price up further, which closes more shorts, which produces more buying.

The result is a sharp, self-reinforcing move driven by the mechanics rather than by anybody's opinion about the asset. It is not manipulation — although a large enough participant can deliberately aim at a cluster of visible short positions, and crowded shorts on a small asset are a known target.

The cost of holding either one

A spot long costs nothing to hold. You own it; it sits there.

A borrowed short costs interest for as long as it is open. A perpetual contract costs funding — a payment made between the two sides at regular intervals, in whichever direction is more crowded. So a position can be correct in direction, held long enough, and still lose to the running cost. Funding gets its own page in part two, because it is one of the least understood numbers in this subject.