Short covering, refers to short positions at a high level, and buy positions when the price falls to a satisfactory level, resulting in a temporary rebound in prices, but unable to rebound to the original height. It is equivalent to a short profit.

Short covering refers to futures. Investors who were originally short in the foreign exchange market (bearish first) were forced to close their positions or go long (buy) backhand when the trading direction and positions were reversed. Because investors are originally short, the direction when signing futures contracts is to sell, and they need to buy when closing positions. As a result, the original bears became bulls, which contributed to the price increase. If the number of futures of a certain variety is relatively small, one party's.

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, making the exchange rate stop falling and rebound when it fell, and accelerate the rise when it rose.

In short, short covering will help the exchange rate rise. The only difference is the low rebound after the fall or the accelerated rise during the rise.

Large households sold the euro, which dropped from 1.2 1 to1.19; Buy the euro again, making it rise slightly from 1. 19 to 1.20, but it did not return to its original position 1.2 1. This transaction process is called "short covering".