We are among the first to study what drives daily short covering activity and its relation with the weekend effect.

Short covering and selling activities are positively related and short sellers on average are contemporaneous contrarians.

Short-sellers are capable of identifying stocks whose prices tend to decline when they initiate short positions.

The ability of short sellers to successfully cover their positions is less clear.

Friday returns are more negative when covering activity is high. High short-selling-activity firms have larger Monday returns.