What is a Short Squeeze?A short squeeze is a frenzied spike in a...

What is a Short Squeeze?

A short squeeze is a frenzied spike in a stock price resulting from desperate short-sellers trying to buy cover their short positions to prevent larger losses ormargin calls. Usually the availability of short shares are limited or non-existent, which traps short-sellers from scaling shorts at higher prices. As the stock price rises, it triggers margin calls resulting in forced liquidations, in worst-case scenarios. The worst thing for a short-seller is when shares become unavailable to short. That’s like locking the exit doors in a burning movie theater. The buying action from covering short positions adds more fuel to the price spike. It is imperative to check the margin requirements and maintenance requirements on shortable shares. Margin requirements can change daily and failing to observe them can result in forced liquidations intra-day.

2.00 pm is when the banks force close the short positions at any cost. So 1 hr to go, get Ur flaming shorts.