Short Covering
Closing out a short position by buying back the security that was sold short. For short covering to be profitable, the security must have declined in price since the short was opened.
Related terms
Short Position
Selling a security with the promise to buy it back later to close the position. Short positions let traders speculate on falling prices and profit in declining markets.
Read full definitionShort Squeeze
When an event causes the price of a heavily shorted asset to rise rapidly, forcing traders with short positions to add equity to maintain margin or close out by buying back the asset at a loss, which pushes the price higher still.
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Aggressive
A description of traders and/or price action acting with conviction.
Read full definitionArbitrage
The simultaneous buying and selling of the same currency in different markets to profit from small price differences. The strategy exploits temporary inefficiencies in FX markets.
Read full definitionAt Best
An instruction given to a dealer to buy or sell at the best rate that can be obtained at a specific time.
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An instruction given to a dealer to buy or sell at a specific price or better.
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A third party coordinating the sale of financial securities between sellers and buyers. Exchanges only accept orders from their members, so traders and investors use brokers as intermediaries; brokers are compensated through commissions, fees or payment from the exchange.
Read full definitionBulls
Traders who expect prices to rise and who may be holding long positions.
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