Short-Covering Is Lying Beneath the Recent Stock Market Rebounds

Short-Covering Is Lying Beneath the Recent Stock Market Rebounds

The S&P 500 Index has started each day this week down significantly on fears of trade wars and slowing economic growth only to recover and close well into the green. While the movements of the stock market aren’t always clear, there is a culprit lurking beneath these moves: short-covering.

Short Selling Banned in Another Country to Boost Stock Market Confidence - Legalization Profiles

In a bold move aimed at stabilizing its financial markets, another country has implemented a temporary ban on short selling, a strategy that allows investors to profit from the decline in a stock’s price. The decision comes in response to heightened volatility in the stock market, with officials seeking to protect investor confidence and curb speculative trading that could further destabilize markets. What is short-selling, and why is it being b…