Short Position

A trade betting on the price decrease of a digital asset.

What is Short Position?

A short position on a Perp DEX involves selling a perpetual swap contract with the expectation that the price of the underlying digital asset (e.g., ETH) will fall. For instance, on GMX, a trader might open a 10x leveraged short position on BTC at $60,000, profiting if the price drops to $55,000, with leverage amplifying returns.

Short positions are subject to funding rates, where shorts pay longs if the market is skewed toward bearish sentiment. Like long positions, they face liquidation risks if the market moves upward, requiring sufficient margin to maintain the position. Shorting is a common hedging strategy but demands close monitoring in volatile markets.