Buy to cover

Buy To Cover
The buy to cover order allows you to buy back stocks or options that you have shorted in order for you to fill your position.

The sell or buy to cover exit is initiated when the stock, future, or currency price pierces outside the upper Bollinger Band.
These buy and sell signals are graphically represented in the chart of the E-mini S&P 500 Futures contract shown below: ...

Stop Market Order to Buy to Cover
This is a stop strategy for short positions, where a trader places a buy to cover order above current market levels in order to stop out a losing position.
Above the Market Order Chart Example ...

Short Squeeze: A situation in which traders who have sold short are forced to buy to cover their short positions.

You will also see "Buy to Cover", Buy to Close" or "Cover" used, and these also mean the same thing. Be sure to double check with your brokerage firm, but this is what I have seen using different accounts myself.

You close your position by buying back the shares (buy to cover) and giving them back to your broker. Typically, not all stocks can be shorted, depending on the inventory of shares your broker holds.

Assume you own "xyz" now worth $10 a share... You sell a covered call @ $1 for 2-month expiration...
At the same time you place an order to buy to cover @ $11... Is this an accepted practice?
Peter ...

This is especially true if the stock market was looking as if it should keep going down. Additionally, as short sellers start to buy to cover their shorts, it can potentially push the market and other stocks up, ...

In order to sell short, the investor must borrow the security from his broker in order to make delivery to the buyer. The short seller will eventually have to buy the security back, or buy to cover, in order to return it to the broker.

prevents the stock price from going up and it starts to bounce back down, the trader can make a nice (!) profit, usually much larger than the amount of loss he would incur if the trade turned against him (in which case, he would have to buy to cover).

where you hope to profit at some predetermined level with a buy limit order. Sometimes, this is also referred to as a stop order because it is a conditional exit, but you are establishing a level, which is the "limit" price you will buy to cover your ...

See also: Stock, Short, Cover, Sell, Market