short squeeze

A **short squeeze** is a market phenomenon that occurs when a heavily shorted stock or asset experiences a rapid price increase. This price surge forces short sellers-investors who have bet against the stock by borrowing and selling shares-to buy shares to cover their positions and limit losses. The resulting spike in buying activity further drives up the stock price, creating a feedback loop that can lead to dramatic and sudden price movements. Short squeezes are often triggered by positive news, strong buying momentum, or coordinated buying efforts, and they can create significant volatility in the markets. Understanding short squeezes is essential for traders and investors looking to navigate high-risk trading environments.