Key Terms
Going long
Buying an asset to profit from a rise in its price, the ordinary direction of investing, with loss limited to the amount paid.
By the Investfora Research Desk
Going long means buying an asset in order to profit if its price rises — the ordinary direction of investing, named mainly to distinguish it from going short. A long position gains when the price climbs and loses when it falls, and because the buyer's outlay is the purchase price, the most that can be lost is the amount paid: a price cannot fall below zero.
A worked example
Suppose a share is bought at a hypothetical £20. If the price rises to £26, the position shows a gain of £6 per share, or 30 per cent of the purchase price. If the issuing company failed entirely and the share price went to zero, the loss would be the full £20 paid — severe, but fixed and knowable in advance. The upside carries no such cap: a rise to £60 would be a gain of £40, twice the original outlay.
Going long identifies the direction of a position and nothing more. It says nothing about how likely a rise is, how long one might take, or how far a price can fall short of total loss along the way.