Short covering
Volume Profile Analysis glossary · Profile Shapes & Distributions
Definition
Aggressive buying driven by short-position holders forced to exit, not by genuine new bullish conviction. Often produces P-shape profiles and ends with absorption at the highs.
Short covering in plain English
Short covering is buying that happens not because people are excited, but because people are trapped. A 'short seller' is someone who bet that a price would FALL; if it rises instead, they lose money every tick higher and eventually panic-buy to close the bet and stop the bleeding. That forced buying can rocket the price up fast — but it's fake fuel, because once the trapped sellers are out, the buying dries up and price often stalls right at the top.
Learn these first
Practice Short covering
Related Volume Profile Analysis terms
Volume Profile Analysis practice questions · Volume Profile Analysis flashcards · Volume Profile Analysis study guide