Long versus Short

The terms long and short simply refer to the position a trader has taken with a trade; the trader has either bought or sold it. The term long simply means that you have bought the currency; the term short means you have sold it. For example, if a trader decides to buy GBP/USD, it means she has gone long British pounds and short U.S. dollars because she has bought the GBP and sold the USD.

TABLE 1.5 Mechanics of a GBP/USD Currency Trade