Short
Short position: Going short, or shorting, means taking a position that gains value when a crypto asset's price falls. Traders usually short with futures contracts, or by borrowing coins to sell now and buy back later. If the price rises instead, the short loses money, and that loss has no fixed limit.
How shorting works
The classic short borrows a coin, sells it at the current price and buys it back later to return it. If the price has fallen, the trader keeps the difference. In crypto, most shorting happens through perpetual or dated futures, where you open a short position against margin without borrowing the coin yourself.
What is a short squeeze?
A short squeeze happens when the price rises and short sellers rush to buy back and close their positions, or are liquidated. That buying pushes the price higher, which can force out more shorts. Squeezes can cause sharp, fast moves in either a single coin or the whole market.
Short vs long
A long gains when the price rises and a short gains when it falls. Some investors use a short to hedge coins they already hold, but it adds cost, funding payments and complexity.
Frequently asked questions
Why is shorting riskier than buying?
When you buy, the most you can lose is what you paid. A short loses more the higher the price rises, and leverage can trigger liquidation quickly.
Can Australians short crypto?
Some platforms offer futures or margin trading, subject to local rules. They are complex leveraged products where losses can be rapid.