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At present, there is no stock involved, and some futures are discussed. Most of them are stock index futures. When they are sold short, they must be bought back to cover their positions, which is called covering their positions.

Covering positions will only appear in securities markets that can be shorted, such as US stocks and China futures.

The domestic stock market can give you an example with securities lending.

The so-called short position refers to the party that sells the stock.

For example, if you borrow 10000 yuan (10 yuan, 1 share, a total of 1000 shares) from a securities company and sell it, then the stock plummets and falls to 5 yuan, which is very cheap.

Many people want to buy it because it is cheap. Many people will push up the stock price, such as going to 5.5 yuan. If you think it will go up, buy 1000 shares and return them to the securities company. So 5500 can buy 1000 shares. So you made 4.5 thousand.

What you do to make up the position refers to the process of buying shares again and returning them to the securities company after you sell them by short selling.