A short squeeze occurs in stock trading.
A short squeeze is when there is a temporary lack of supply and a large amount of demand for a stock thus forcing the stock price higher and higher.
A short squeeze can occur if a stock is heavily shorted. This means that a large portion of the float is held short, where these short sellers are hoping to gain from a decrease in the price of the stock.
If the stock price starts to rise quickly, this may trigger a short squeeze, where the short sellers will probably want to liquidate their positions and take their losses before they lose any more money. This additional “buying to cover” their short positions produces an unrelenting demand for the stock, and of course usually pushes the stock price even higher.
ManDrake
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