A long position profits if the price rises. A short position borrows shares and sells them, aiming to buy them back cheaper later. A portfolio with both can profit from the difference between strong and weak companies even when the market is flat.
Net exposure is longs minus shorts; gross exposure is longs plus shorts.
Why it matters
Shorting carries unlimited loss in theory, borrowing costs and the risk of a squeeze, so it needs strict position sizing. Retail investors often express a negative view through options or inverse products instead.
General information, not advice.