7.1.5.1 Buy and Sell Orders
An order is a request to buy or sell a security. An investor who buys a security becomes the owner of the security. This is also called having a long position in a security. When an investor sells a security, the sale occurs in one of two ways: he can sell long or sell short. If he sells long, he is selling securities that he already owns. If he sells short, he sells securities that have been or will be borrowed. An investor sells short when he expects the price of the security to drop in the future. His goal is to sell at a high price and buy the shares back in the future at a lower price, profiting from the difference.