Markets · 6 pages · 12 min

Why a short squeeze is about the borrow

A short squeeze forces shorts to buy because the shares they borrowed are scarce, costly, or recalled.

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From the opening

A short squeeze is a rising price fed by short sellers buying shares in order to return them, while the borrow is scarce or being recalled. The price move hurts the shorts, but the squeeze is specifically about the difficulty of staying borrowed or of finding shares to deliver. The opening covers recalls turn shorts into buyers, scarce loans raise the fee, and covering can lift the price.

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Inside

Recalls turn shorts into buyers
Scarce loans raise the fee
Covering can lift the price
An easy borrow is not a squeeze
Where the idea stops applying
A distinction worth keeping

Sources

Short squeeze and stock loan recalls
Securities-lending fees and availability

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Why a short squeeze is about the borrow

From the opening

Inside

Sources

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