What is Short squeeze?
A rapid rise forced by shorts buying back, which can feed on itself in thin markets.
When price rises against heavily shorted positions, buyers who must close become buyers. In a thin book that buying pushes price further, forcing more closures.
Squeezes are short-lived and hard to forecast, which is why the models here publish ranges rather than trying to catch them.
Related terms
- Open interestTrading
The total value of futures positions currently open, a measure of how much leverage is in play.
- LiquidationTrading
Forced closing of a leveraged position when its margin falls below the maintenance level.
- LiquidityTrading
How easily you can buy or sell without moving the price: depth, spread and turnover together.