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QuantSchool: Understanding direction: BUY / SELL, LONG / SHORT

Core Definitions

BUY and SELL

• BUY - Opening a position to profit from price increases
• SELL - Closing an existing position or opening a short position (context-dependent)

LONG and SHORT

• LONG - Owning an asset with expectation it will appreciate
• SHORT - Borrowing to sell an asset with expectation it will depreciate

Key Differences

Term	Position Action	Market View	Profit When
BUY	Opening transaction	Bullish	Price rises
SELL	Closing or opening short	Bearish	Price falls (if shorting)
LONG	Owning the asset	Bullish	Price rises
SHORT	Borrowing to sell	Bearish	Price falls

How QuantWave Uses These Terms

In Forecasts

• BUY - LONG: Recommended long position (expecting price increase)
• SELL - SHORT: Recommended short position (expecting price decrease)
• SELL (alone): Exit signal for existing long position

Practical Examples

Scenario 1: "BUY - LONG AAPL $150 Target $165"

• Action: Open long position at $150
• Goal: Profit as price rises to $165

Scenario 2: "SELL - SHORT TSLA $180 Target $160"

• Action: Open short position at $180
• Goal: Profit as price falls to $160

Scenario 3: "SELL AAPL $170" (when holding long position)

• Action: Close existing long position at $170
• Goal: Realize profits

Important Considerations

Market Context Matters

• BUY/SELL can mean different things depending on existing positions
• LONG/SHORT always clearly indicate position type

Risk Differences

• Long positions: Risk limited to full investment
• Short positions: Theoretically unlimited risk (prices can rise indefinitely)

QuantWave's Approach

• Always specifies position type (LONG/SHORT) in forecasts
• Provides clear entry/exit points for each
• Includes risk parameters for both directions

Understanding these directional terms is crucial for proper execution of QuantWave forecasts. While BUY/SELL indicate trading actions, LONG/SHORT specify position types - together they provide complete trade instructions.