As we know that we get rally during future short covering but I am confused ,what happen when someone cover their option writing in high Volume.
To cover shorts a trader has to buy the same number scrips from the market to close their open short positions.
When someone is buying in large quantity in a hurry , they buy at the highest prices available in the market.
This creates a temporary demand and the counter sellers keep increasing their prices.
Thus SHORT Covering leads to increase in price.
1 Like
Does it creates any impact in Index movement or movement in market?