Finance glossary
Short Squeeze
Definition
A rapid price spike forcing short sellers to buy back, fueling further gains.
A short squeeze happens when a heavily shorted stock rises sharply, forcing short sellers to buy shares to cover their positions and limit losses. That buying pushes the price even higher, creating a feedback loop. The 2021 GameStop episode is a famous example of a retail-driven squeeze.
In a sentence
Frantic buying by trapped short sellers fueled a short squeeze that doubled the stock in days.
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