The client may open a long or short position based on his/her individual market expectation.
a) Long position
If the client expects that an underlying asset’s price is going to rise, the client might open a buy position (also known as “going long”). By a long position the client opens a trade which speculates on the rising price of financial instrument.
For example:
Forex trading: If the client thinks that EURO is likely to strengthen against the US dollar, he/she may decide to buy the EUR/USD pair (please always bear in mind that by trading CFDs the client is not buying/selling the actual currency).
b) Short position
If the client expects that an underlying asset’s price is going to fall, the client might open a sell position (also known as “going short”). By a short position the client opens a trade which speculates on the falling price of financial instrument.
For example:
Forex trading: If the client thinks that EURO is likely to fall against the US dollar, he/she may decide to sell the EUR/USD pair (please always bear in mind that by trading CFDs the client is not buying/selling the actual currency)