What is short covering in stocks/trading?
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When you sell a stock short, you borrow the stock you sell. You’re in effect betting the stock price will fall and you will be able to buy the stock at the lower price in order to repay the shares you borrowed. When you buy the shares to payback what you borrowed, you’re covering your short sale. If the price of the stock falls, you make a profit, if the share price goes up, you have a loss.
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