short positionThe covering refers to the short position in the high positionSales opening, and when the price drops to a certain extent, it is forced toclose a positionEven backhand long, which causes the price to rebound temporarily at this time, but can not rebound to the original height, which is equivalent to short profits.
Chinese name
Short covering
Foreign name
Short Covering
Interpretation
It was originally a buyer's market, but the market was empty due to news
Short covering refers tofutures,foreign exchange marketShangyuanShort% of investors (sell down first)PositionForced by reverse developmentclose a positionOr backhandGo long(Buying). Since the original investor is short, signFutures contractWhen the direction is to sell, you need to buy it when you close the position. In this way, the original short position becomeslong position, for priceriseIf the number of futures of a certain variety is relatively small and one party has sufficient funds, it is possible to continuepull up(or drive down) the price to force the competitorCompulsory liquidationSo that the price will continue to develop in a favorable direction[1]
understand
Announce
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Because the original investor isShort, SignFutures contractWhen the direction is to sell,close a positionThen you need to buy it.In this way, the originalshort positionBecamelong position, which has played a role in fuelling the price riseExchange rateStop falling and rebound when falling, and accelerate rising when rising.
In short, short covering will help the exchange rate rise. The only difference is thatfallAfter that, the rebound from the low position was accelerated in the process of rising.
Example
Announce
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Selling by large customerseuro, making it fall from 1.21 to 1.19;Buying the euro again raised it from 1.19 to 1.20, but it did not return to 1.21.This transaction process is called:“Short covering”。
