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 ?
manufacturing activity data for February and buying to cover short positions following its plunge to a three-year low at the 102 yen level the previous day.
Dealers said his remarks sparked a round of buying to cover oversold dollar positions, sending the U.
There is buying to cover some payments needed by banks," said Furqan Punjani, an economist at BMA Capital Management in Karachi.