Cover (a short)
Definition · Level 0 · Market basics
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To buy back the shares you sold short, so you can return them to the lender and close the position.
Example
Short 200 at 30 and buy 200 at 24: you “cover” and keep the $6 a share difference.
Where Tradecraft teaches it
Level 0 · Market basics, in the lesson “Long, short & P&L”: Owning versus borrowing and selling, and how profit and loss is counted.
Related terms
- Long positionOwning an asset, or a contract that gains as it rises: you profit when the price goes up.
- Mark-to-marketRevaluing open positions at current prices (typically each day’s close), so paper gains and losses flow into account equity and margin daily.
- P&LProfit and loss: the dollars a trade, position or whole portfolio has made or lost over a period, the number every trader is judged on.
- PortfolioThe whole collection of positions an investor or fund holds, judged together for overall risk and return rather than one holding at a time.
- Realized vs unrealized P&LProfit or loss locked in by closing a position, versus paper profit or loss on a position still open, revalued at the current price.
- Short sellingBorrowing shares you don’t own and selling them, aiming to buy them back cheaper and return them to the lender: profits when the price falls, losses…