Glossary · from the DESK dictionary
Short Squeeze
A rapid, substantial price increase in a security, forcing short sellers to cover their positions at a loss, which further amplifies buying pressure and the price rise.
In plain words
Creates a self-reinforcing cycle, in which rising prices trigger more covering, further driving up the price.
What it means for traders
An important practical concept, widely known through spectacular events such as the GameStop stock in 2021.
Common pitfalls
Can result in substantial, sometimes unlimited losses for short sellers, forced to cover at high prices.
Related terms
Cornering the Market · Days to Cover · Gamma Squeeze · Long Squeeze · Short Covering · Short Interest · Short Interest Ratio (Days to Cover) · Squeeze Play
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.