Cover on a Bounce
Closing a short position once price starts rebounding, rather than waiting to see how far the bounce goes.
In plain English
Closing a short position once price starts rebounding, rather than waiting to see how far the bounce goes.
When you are short and a falling market suddenly kicks back up, you can cover on a bounce: buy back as the rebound starts, protecting the profit you have or limiting the damage.
In market commentary the phrase often explains a sharp rise: shorts who had a good run are locking it in as price bounces, and their buying makes the bounce bigger.
Keep this word for good
Your free Private Swap Lounge saves the terms you’ve learned and quizzes you on them. Portal under construction. Expected delivery date is December 01, 2026.