: The repurchased shares are returned to the lender, ending your obligation. Profit and Loss Examples
Understanding Buy to Cover: Closing Short Positions Explained
"Buy to cover" is a specific trade order used to close an existing . Since short selling involves borrowing shares to sell them, you must eventually buy those shares back to return them to the lender—this act of repurchasing is "covering". How Buy to Cover Works This trade is the final step in a short sale strategy:
: You buy the same number of shares back from the market.
When executing a buy-to-cover, you typically choose between two order types:
