How do I close out an existing short position?

To close a short position, you buy back the same number of shares that you initially borrowed and sold short. For example:

  • Check current market prices for the stock you shorted. Buy shares at the market price to cover your short position.

  • Place a buy order to cover at the current market price. They will handle buying the necessary shares to close your short position.

  • Buy back your shares using a limit order set at a maximum price you're willing to pay. The order will trigger if the price reaches your limit to close the short position.

  • Use stop-loss or stop orders to automatically close your short position if the price reaches a certain trigger level. This limits losses by ensuring the short gets covered at the best available price once your trigger is reached.

  • Place a buy stop-limit order which combines the features of a stop price trigger and a limit on the maximum you will pay using this strategy.