How Long Positions Work in Margin Trading
1. You deposit margin (collateral) 2. You open a long position at the current price 3. If the price rises, you profit 4. If the price falls, you lose 5. You close the position to realize profit/loss
Example (10x Leverage):
- Margin: $1,000
- Entry: BTC at $50,000 (position size: $10,000 = 0.2 BTC)
- BTC rises to $55,000 (+10%)
- Profit: $10,000 × 10% = $1,000 (100% return on margin)
Long vs Short
| Aspect | Long | Short |
|---|---|---|
| Profits when | Price goes up | Price goes down |
| Theoretical max profit | Unlimited | 100% (price to zero) |
| Theoretical max loss | 100% of margin | Unlimited (price can rise infinitely) |
| Market sentiment | Bullish | Bearish |