Posted by Bruce Kahl on February 14, 2007
In Reply to: "going short", "going long" posted by ESC on February 13, 2007
: : Where do the finance terms "selling short", "going short", "going long" etc. come from?
: These expressions are pretty straight forward:
: "Bears usually 'sell short,' selling stocks they do not own in the hope that by the time they must deliver the stock to the buyer, the price will have dropped and they can make a profit on the difference. A bull optimistically believes that the market is going up and so buys stock, taking the 'long' position, and expects to sell later at a profit." Page 57, "Wall Street Slang: High Steppers, Fallen Angels, & Lollipops" by Kathleen Odean (Dodd, Mead & Company, New York, 1988). And on Page 86 it says, "Most market players take 'long positions,' buying stocks with hopes that the price will go up.if the (market) order goes through and then the price goes down, the position proves to be 'long and wrong.'"
: See bull market, bear market at http://www.phrases.org.uk/bulletin_board/13/messages/1164.html
It is about inadequacy.
In the English language, the word "short" is sometimes used to indicate an inadequacy, as in "short of cash" or "short of time." In finance, this usage is applied to situations where a party sells securities he does not possess. Such a sale is called a short sale because it creates for that party an inadequacy--a net negative position--in the sold security.
And so it easily follows then that the opposite of a short is the long position.