Question Regarding Financial Terms--Help!

[WinterParkDonkey]

I watched the Goldman Sachs hearing yesterday. Friends, numbers over $100,000 make my eyes glaze over. The arrogance aside, what does "long" and "short" mean in finance? I think that a lot of Duers would appreciate this. Thank you.

[Nite Owl]

1. When you go long a stock

you are buying a position.
When you short a stock you a actually selling then buying it at a lower price to cover your short. Let's say you think Microsoft will go down to $20. It is presently selling at $32. You short the stock and buy to cover it under where it is being bid. It goes to $20 you make the difference in price. There is nothing inherently wrong in shorting a position but GS was shorting what they were telling their clients to buy.

[WinterParkDonkey]

2. Thanks!