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The Short Squeeze –Forced buyback of short positions

This lesson assumes that you understand your financial goals and are familiar with all the risks and opportunities online trading provides. You can schedule a free call with our expert trader that will help you find the best way to achieve your financial goals.

Short squeezes occur when a stock with large short interest moves sharply higher, causing large-scale short covering of that stock’s shares. The price spike ignites extensive forced buying as clients and brokers scramble to cut losing short positions.

It’s important to realize that when you hold a short position, your broker requires cash