Long-Short Ratio

See: Long/Short Equity. See: Long/Short Fund.

How long do you, um, want to be? Ok, nvrmnd on that one.

Instead, think about yourself as a hedge fund manager who is supposed to deliver positive returns when the market is up 2, 5, or 20%...or down the same amounts.

So you have to figure out how long you want to be—like...how bullish are you about your company names and/or the overall market itself? And same deal for your shorts. This quarter, who is gonna be awesome? Who’s gonna suck? And by how much?

The ratio reflects the number, or this level of belief in the wrestling match of positivity and negativity.

A given fund is long $300 million in QQQ, a NASDAQ-y index fund that’s very liquid. They’re short $200 million of MSFT because they think MSFT is gonna perform way worse than the overall tech index. Their long/short ratio is 3/2, or 150%.