Buying In

Buying in refers to the process of purchasing securities, often at market price, to cover a short position or to replace securities that were not delivered on time, usually in a margin account. In the context of short selling, if the price of the stock rises unexpectedly, the broker might require the investor to "buy in" the stock to close out the short position and limit potential losses. In other cases, buying in occurs when a seller fails to deliver the securities sold, and the buyer initiates a purchase on the open market to complete the transaction.

Example

If an investor short sells shares of a company and the stock price begins to rise, their broker may require them to buy in the shares at the current market price to close the position and prevent further losses.