Economics · Short Covering
In stock market terminology, what does 'short covering' involve?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Purchasing insurance coverage to protect an investment portfolio against market crashes.
- 2Pledging existing equity shares to obtain a short-term bank loan.
- 3Selling shares immediately after purchasing them to secure a minimal profit.
- 4Buying back shares to close out an open short position and return the borrowed stock.✓
Correct answer
Buying back shares to close out an open short position and return the borrowed stock.
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