• Buy to cover refers to a buy order that covers a trader’s short position.
  • Short positions are borrowed from a broker, and buying to cover allows you to “cover” short positions and return them to the original lender.
  • The trade is made with the belief that the price of the shares will fall, so the shares are sold at a higher price and then repurchased at a lower price.
  • Buy orders to cover are usually margin trades.