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Short Squeeze |
Also found in: Wikipedia | 0.02 sec. |
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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 in order to cover their positions and prevent (limit) losses. This sudden surge of buying leads to even higher prices, further aggravating the losses of short sellers who have not covered their positions.
Short Squeeze A situation in which a rapid increase in demand coupled with a small supply causes a stock price to rise significantly. This occurs most commonly in small companies with relatively few shares outstanding. Short Squeeze What Does Short Squeeze Mean? A situation in which the price of a stock moves upward because of a lack of supply and an excess of demand. Investopedia explains Short Squeeze Short squeezes occur more often in smaller-cap stocks with small floats. If a stock starts to rise rapidly, the trend may continue because the short sellers probably will want to unwind their short positions (buy back to cover the short). For example, say a stock rises 15% in one day; those with short positions may be forced to liquidate and cover their position by purchasing the stock. As short sellers continue to buy back the stock, the price is pushed even higher. Related Terms: How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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