Long vs Short

Long vs Short — When to Use Each

Going Long

A long position profits when the asset price increases.

How it works on Lavarage:

1. You deposit collateral in the volatile token (e.g. SOL)
2. The protocol borrows a stable token (e.g. USDC) from the pool
3. The USDC is swapped into more SOL via Jupiter
4. You now hold a leveraged SOL position

Example: You deposit 1 SOL at $150, use 3x leverage. Your position is worth 3 SOL ($450). If SOL goes to $165 (+10%), your position is worth $495. After repaying the ~$300 borrowed USDC + fees, you keep ~$195 → a ~30% return on your 1 SOL.

Best for:

• Bull markets or anticipated breakouts
• Trading tokens you already hold
• Momentum plays

Going Short

A short position profits when the asset price decreases.

How it works on Lavarage:

1. You deposit collateral in a stable token (e.g. USDC)
2. The protocol borrows the volatile token (e.g. SOL) from the pool
3. The SOL is sold for USDC via Jupiter
4. When you close, USDC is swapped back to SOL to repay the borrow

Example: You deposit 150 USDC, use 2x leverage, shorting SOL at $150. The protocol borrows 1 SOL ($150), sells it for USDC. If SOL drops to $135 (-10%), buying back 1 SOL costs only $135. After repaying, you profit ~$15 on $150 collateral → a ~20% return (2x × 10%).

Best for:

• Bear markets or anticipated drops
• Hedging existing long exposure
• Trading overvalued tokens

Quick Comparison