short covering

English - English

Definition of short covering in English English dictionary: Buying stock to return stock previously borrowed to make delivery on a short sale; The purchase of securities by a short seller to replace those borrowed at the time of a short sale See also Selling Short; the purchase of securities or commodities by a short seller to close out a short sale; The buying of securities, stocks, or commodities in order to close out a short sale; A short seller usually borrows shares from others for his operation; when he actually buys them to replace when he had borrowed at the time of short sale, he is covering his SHORT POSITION or short covering; The act of closing a short sale by purchasing shares Sometimes stock rallies are explained as the result short covering by large numbers of investors; The process of buying back stock that has already been sold short; Buying stock in order to close out, or cover, a position previously created by a short sale; Trades that reverse, or close out, short-sale positions For instance, when a stock rises sharply in price, investors who shorted the stock, expecting it to fall, are often forced to purchase the shares they borrowed from their brokers That can push the price of the stock up even higher See "Short interest " BACK TO TOP; Buying to unwind a shortage of a particular currency or asset; Trades that reverse, or close out, short-sale positions In the stock market, for instance, shares are purchased to replace the shares previously borrowed; The action taken by a trader or investor to buy securities previously sold short in order to deliver them and thereby close out a short position; Used in the context of general equities Actual purchase of securities by a short seller to replace those borrowed at the time of a short sale; Purchasing futures to offset a short position