short squeeze

A situation in which the price of a stock rises quickly, and investors who sold the stock short, scramble to cover their positions. The act of buying back shares further pushing prices up, squeezing shorts out of their positions.



Thinly traded shares with little available information, also called ‘Penny stocks,’ are most susceptible to short squeezes.



In Foreign Exchange there is practically never a currency illiquid enough for short squeezes to be possible.

Related Words