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| Man running to Buy or Cover-up Stocks Short-Sold Earlier |
A Place for Learning and Practicing "Value Investing" Taught by Benjamin Graham and Successfully Executed by Warren Buffett.
Sunday, October 23, 2016
What is Short-Covering?
Short covering is the corrective action
for short selling. It
is the reverse of short selling. A speculator makes a bet that the price of a
particular scrip or share is likely to fall and short sells. The price may go
against his or her expectations and may instead rise. In this situation he or
she will now have to buy the shares immediately, to honour previously short
sold (cover the sale) as well as minimise the loss - as if the buy decision is
delayed the price may climb even higher increasing the loss.
Short
selling, short covering and so on are purely speculative activities and are
NOT-AT-ALL considered as investing.
Please learn value
investing at ‘Wealth Vidya’ and gradually but
surely progress towardsfinancial freedom and become rich and wealthy over a
long period of time.
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