Short squeeze

Short squeeze

In finance, a short squeeze is a rapid increase in the price of a stock that occurs when there is a lack of supply and an excess of demand for the stock.

Short squeezes result when short sellers cover their positions on a stock. This can occur if the price has risen to a point where these people simply decide to cut their losses and get out. (This may happen in an automated manner if the short sellers had previously placed stop-loss orders with their brokers to prepare for this eventuality.) Since covering their positions involves buying shares, the short squeeze causes an ever further rise in the stock's price, which in turn may trigger additional covering.

Short squeezes are more likely to occur in stocks with small market capitalization and small floats.

The opposite of a short squeeze is the less common long squeeze.

ee also

*Short ratio

External links and sources

* [http://shortsqueeze.com Short Squeeze Stock Short Interest Data Lookup]
* [http://www.blogmybrain.com/stock_apps/short_squeeze/short_squeeze.html Short Squeeze Stock List]
* [http://www.squeezereport.com Free short interest data and reports]


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  • short squeeze — When a lack of supply tends to force prices upward. In particular, when prices of a stock or commodity futures contracts start to move up sharply and many traders with short positions are forced to buy stocks or commodities ( commodity) in order… …   Financial and business terms

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