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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.