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In the stock market, a short squeeze is a rapid increase in the price of a stock owing primarily to an excess of short selling of a stock rather than underlying fundamentals. A short squeeze occurs when demand has increased relative to supply because short sellers have to buy stock to cover their short positions.
A GameStop store in 2014. GameStop, an American chain of brick-and-mortar video game stores, had struggled in the years leading up to the short squeeze due to competition from digital distribution services, as well as the economic effects of the COVID-19 pandemic, which reduced the number of people who shopped in-person.
A short squeeze can occur if the price of stock with a high short interest begins to have increased demand and a strong upward trend. To cut their losses, short sellers may add to demand by buying shares to cover short positions, causing the share price to further escalate temporarily.
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GameStop stock tanked more than 18% Wednesday as a rally among meme names showed signs of fading.Shares of the video game retailer are coming off a two-day short squeeze. GameStop stock gained ...
When stock prices experience rapid shifts, the conditions may be ripe for a squeeze. In this scenario, investors may find themselves buying or selling shares of stock outside their normal trading ...
Short sellers must be aware of the potential for a short squeeze. When the price of a stock rises significantly, some people who are shorting the stock cover their positions to limit their losses (this may occur in an automated way if the short sellers had stop-loss orders in place with their brokers); others may be forced to close their ...
Coinciding with the peak of GameStop's stock, traffic was down 20.3% year-over-year for the week of Jan. 25, according to Placer.ai. For the full month of January, monthly visits were down 16.8% ...