HOW TO PLACE AN ORDER

You need to be very careful and very precise when placing an order. This is true especially if you place the order by telephone. In the heat of trading, even experienced traders can make the mistake of buying when they wanted to sell. With electronic order entry you should not press the send button before you’ve checked and rechecked that you’ve entered everything correctly.
Terminology
You’ll need to get familiar with using the right words to enter an order. Long descriptions don’t work. The order clerk doesn’t care why you’re making this trade. Learn the following terms:
1. When you have no position and you buy, you are initiating (entering) a long position.
2. When you are holding a long position and you sell, you are liquidating (exiting) a long position.
3. When you have no position and you sell, you are initiating (entering) a short position.
4. When you are selling short, you are initiating (entering) a short position.
5. When you are holding a short position and you buy, you are liquidating (exiting) the short position.
In futures:
• If you are long 1 contract and you sell 2 contracts, you have closed out your long and you are now short 1 contract.
• If you are short 1 contract and you buy 2 contracts, you have covered your short and are long 1 contract.
• When you go from long to short, or short to long, you can say that you’ve reversed your position.