Identify the explosive potential of crowded short trades.
>20% is considered high
Rising price triggers the squeeze
Short squeezes are high-risk events. A high score indicates a crowded trade where sellers may be forced to buy back shares at any price.
Squeeze Potential
Crowdedness
25%
Short Interest
Exit Difficulty
8
Days to Cover
A short squeeze occurs when a stock with high short interest starts to rise in price. Short sellers, who have "borrowed" shares to sell them, are forced to buy the shares back to close their positions and limit their losses. This mass buying creates a feedback loop that sends the price skyrocketing.
This is the percentage of a company's total shares that are currently held short. Anything above 10% is significant, and above 20% is considered extreme.
Also known as the "Short Ratio," this is the number of shares short divided by the average daily volume. If it's 10, it would take 10 days of normal trading for every short seller to exit. The higher this number, the more violent the squeeze can be.
Short squeezes are highly unpredictable and extremely volatile. While they offer massive upside potential, they often end in rapid crashes. Never trade a potential squeeze with money you cannot afford to lose.
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