When a trader says he or she is going to "cover," it typically refers to the act of closing out a short position in a security, stock, or forex position. Short selling is a trading strategy where a trader borrows shares or securities and sells them in the market with the expectation that the price will decline. If the price does indeed drop, the trader can buy back the shares at a lower price, return the borrowed shares to the lender, and pocket the difference as profit.To "cover" a short position, the trader needs to buy back the shares or securities they initially sold, effectively closing out the position. This action is taken to realize the profit from the short sale or to limit potential losses if the price of the security has risen instead of falling as the trader had anticipated.
When a trader says he or she is going to "cover," it typically refers to the act of closing out a short position in a security, stock, or forex position. Short selling is a trading strategy where a trader borrows shares or securities and sells them in the market with the expectation that the price will decline. If the price does indeed drop, the trader can buy back the shares at a lower price, return the borrowed shares to the lender, and pocket the difference as profit.To "cover" a short position, the trader needs to buy back the shares or securities they initially sold, effectively closing out the position. This action is taken to realize the profit from the short sale or to limit potential losses if the price of the security has risen instead of falling as the trader had anticipated.
When a trader says he or she is going to "cover," it typically refers to the act of closing out a short position in a security, stock, or forex position. Short selling is a trading strategy where a trader borrows shares or securities and sells them in the market with the expectation that the price will decline. If the price does indeed drop, the trader can buy back the shares at a lower price, return the borrowed shares to the lender, and pocket the difference as profit.
To "cover" a short position, the trader needs to buy back the shares or securities they initially sold, effectively closing out the position. This action is taken to realize the profit from the short sale or to limit potential losses if the price of the security has risen instead of falling as the trader had anticipated.
