: You short 100 shares at $50 each (total $5,000). The price drops to $40. You buy to cover at $40 (total $4,000). You keep the $1,000 difference as profit (minus fees).
: The repurchased shares are returned to the lender, ending your obligation. Profit and Loss Examples what is buy to cover
When executing a buy-to-cover, you typically choose between two order types: : You short 100 shares at $50 each (total $5,000)
Understanding Buy to Cover: Closing Short Positions Explained 000). You keep the $1
: You short 100 shares at $50. The price rises to $60. You are forced to buy to cover at $60 (total $6,000). You lose $1,000 plus fees. Common Order Types
: You buy the same number of shares back from the market.