What Is A  Short Squeeze?

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Short squeezes typically occur after a company stock posts a sudden increase. This causes short sellers to try to exit a bearish position quickly.

To sell a stock short, an investor must first borrow the shares. They then consequently sell  in the open stock  market hours.

Short selling is incredibly risky as stock prices have historically tended to  drift upward.

To invest in a short squeeze, traders start by surveying the markets for stocks that have garnered substantial interest from  short sellers.

If they’re heavily shorted, it’s because investors have ample reason to believe that the underlying company faces significant business issues.

Long-term investors may try their hands at winning a short-squeeze trade here and there. But it requires deep research, constant monitoring and the ability to move in and out of a  stock quickly.

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