What is a short squeeze and how do I check if a stock has it?
Asked 4 years ago
I've just started getting into stock market trading and I'm busy learning the terminology, along with the how to do this and that. I've recently read something about 'short squeeze' but I'm not sure I really understand it. Can someone please explain it to me in laymens terms or as simply as possible?
Osasere Okunloye
Friday, June 25, 2021
A short squeeze is an unusual condition that triggers a price rise. Short-sellers borrow asset and intend to buy when there is a price drop. When things don't go as planned, they quickly close their position (which automatically buys the stock). This coincidental close (buy) is what causes the unusual price rise, leading to a short squeeze.
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