Types of positions
A long position refers to buying an asset with the expectation that its value will increase in the future. This type of position is familiar to anyone who has traded on a spot exchange. "Long positions" mean that you can hold any cryptocurrency, even for a long period of time, in anticipation of its price growth.
Short positions, or shorts, represent an opportunity to "play against the market", or make money out of falling prices by temporarily "borrowing" an asset. Such positions were called short because professional traders used them for short-term transactions. Although there are no limitations on the duration of shorts.
Opening and closing short positions
UTEX—Margin offers easy short trading: you just need to send a sell order for a stock or a cryptocurrency you don't have. Also, a short position will open if the size of the asset in your sell order is larger than your balance. To close a short position, you must buy the same amount of the asset.
Example: You opened a short position of -2 ETH at $4000. The total amount of your trade is $8000. After a while, the price of ETH falls to $3500. You "buy" 2 ETH at this price for a total of $7000, thereby closing your short position with a $1,000 profit.
Dividend Charge
If you held a short position in a stock at the time of the ex-dividend date, the full dividend amount is debited from your account. This is standard practice: since you've effectively borrowed shares, you owe the dividend to the lender.
For example, a company pays a dividend of $1.00 per share. You hold 50 shares in a short position. Your account will be debited: 50 × $1.00 = $50.00.
⚠️ Keep this in mind when holding short positions in dividend-paying stocks.