Buy To Cover

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Buy To Cover

To buy a security one has previously sold short in order to close a position. In order to make a profit on a short cover, one must buy the security at a price lower than the price at which one short sold it. Likewise, one may buy to cover to avoid or pay a margin call, if it appears that one will lose in a short sale and the brokerage demands the return of cash or securities. See also: Maintenance margin.
References in periodicals archive ?
There is buying to cover some payments needed by banks," said Furqan Punjani, an economist at BMA Capital Management in Karachi.
Dealers said his remarks sparked a round of buying to cover oversold dollar positions, sending the U.