Recent Lessons

Show all results for ""

Investing: Long and Short Positions Quiz

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Download our mobile app to listen on the go

Get App

Questions and Answers

What does a long position represent?

A strategy to maximize losses.
Ownership in a security. (correct)
A type of investment in derivatives.
A method of short selling.

What must an investor do to close a long position?

Sell the stock in the market. (correct)
Hold the shares for a longer period.
Buy more shares.
Transfer the shares to another account.

Which scenario describes a short position correctly?

An investor holds onto their shares for future gains.
An investor sells securities they do not own. (correct)
An investor buys shares on margin.
An investor sells securities they own.

What is required from an investor when initiating a short position?

<p>They must make an additional margin deposit. (B)</p> Signup and view all the answers

How does an investor close a short position?

<p>By buying back the stock from the market. (A)</p> Signup and view all the answers

Flashcards

Long Position

Owning a security. The investor buys and then sells to close.

Short Position

Selling a security not owned; borrowing to sell.

Long Position Example

Investor buys shares; pays by settlement, sells to close.

Short Position Example

Borrowing shares to sell, then buying to cover short position.

Signup and view all the flashcards

Margin Deposit

Additional deposit to cover rising security value(short position).