Where did the term long and short a stock come from?

Discussion in 'Trading' started by CasperCRF, Aug 4, 2006.

  1. I can't seem to find out where the terms to be long or short comes from? Any one know?
  2. hans37


    I dunno, maybe short selling is called going "short" because one must first engage in borrowing the stock(usually on a short term basis) from a broker.
  3. That's what I was thinking at first, Long for long term and short for short term. Does any one know if you were always able to short a stock from when the stock market first opened or is it a some what newer stategy? I know when I first heard about going short, it was kinda hard to grasp, like how do you sell something that you don't own to begin with.
  4. Interesting question. I broke out my copy of Wall Street Slang: High Steppers, Fallen Angels, and Lollipops, which covers trading-related slang going back many decades -- into the early to mid 1800's -- and found nothing. Long and short are so firmly embedded into the lexicon that even an industry-specific book on slang takes knowledge of their meanings for granted.
  5. From the Wiki on Short selling:

    The term "short" was in use from at least the mid-19th century. It is commonly understood that "short" is used because the short seller is in a deficit position with his brokerage house.

  6. Pekelo


    Well, this article doesn't explain the exact etimology of the term, nevertheless it is very educative and interesting:

    The history of short selling


    A litle extra:
    "...the origin of the term 'bear' to describe speculating for a fall, deriving from a trader who sold the bear's skin before he had caught the bear, first appeared in the early 18th century several years before the appearance of the corresponding 'bull.'
  7. Here is my take:

    Over time, stocks generally tend to go up. (Yes, there are a lot of exceptions to this, but just taking the general market over teh last 100 years, this is true.)

    Therefore, long is a position you take for a longer period of time in general whereas a short position lasts shorter due to this general uptrending that occurs in majority of stocks.