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    Question

    Which of the following means that a trader is buying

    back the shares from the market, which he has initially borrowed and sold, to limit the losses from upward price movement of the share? 
    A Long Build-Up Correct Answer Incorrect Answer
    B Short Build-Up Correct Answer Incorrect Answer
    C Short Covering Correct Answer Incorrect Answer
    D Long Unwinding Correct Answer Incorrect Answer
    E Short Selling Correct Answer Incorrect Answer

    Solution

    Short Covering occurs when short sellers buy back shares they had borrowed and sold earlier, to close their positions and limit losses leading to upward price movement and sometimes driving bullish momentum. Note - Short Selling means a trader borrows shares from a broker and immediately sells them on the open market, expecting the price to fall.

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