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Trading Mechanics
Short Covering
Definition
The process of closing out a short position by buying back the shares that were previously sold short. Also called 'covering' or 'closing a short'.
Related Terms
Short Squeeze
A rapid increase in a stock's price caused by short sellers rushing to cover their positions. When many shorts try to buy shares simultaneously, it can drive the price up dramatically, forcing more shorts to cover.
Short Position
The number of shares of a particular stock that have been sold short but not yet covered or closed out. On the ASX, significant short positions must be reported to ASIC.
See short selling in action
Explore real-time ASIC short position data for ASX stocks.