Hello, short covering refers to the behavior of investors who were originally short in the futures and foreign exchange markets, and were forced to close their positions or go long backhand when their trading direction and positions were reversed. Because investors are short, the direction of signing futures contracts is to sell, and they need to buy when they close their positions. In this way, the original bears became bulls, which contributed to the price increase. If the number of futures of a certain variety is relatively small and one party has sufficient funds, it is possible to continuously raise (or lower) the price, forcing the opponent to forcibly close the position, so that the price will continue to develop in a direction beneficial to him.

In addition, short covering can also be simply understood as: short sellers sell at a high level and buy when the price falls to a satisfactory level, which causes the price to temporarily rebound and rise, but it can't rebound to the original height, which is equivalent to short sellers profiting out.

Finally, it is worth noting that short covering helps the exchange rate to rise. The only difference is the low rebound after the fall or the accelerated rise during the rise.

Risk disclosure: This information does not constitute any investment advice. Investors should not substitute such information for their independent judgment, or make decisions only based on such information. It does not constitute any trading operation and does not guarantee any income. If you operate by yourself, please pay attention to position control and risk control.