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Short Squeeze Definition

A short squeeze occurs when a rising price forces traders holding short positions to buy back the asset to limit losses, further pushing the price higher.

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What is a Short Squeeze?

Short squeezes tend to happen in assets with a high level of short interest relative to available shares or volume.

The resulting buying pressure can cause sharp, rapid price increases.

Example of Short Squeeze

A heavily shorted stock rising sharply as short sellers rush to close positions is undergoing a short squeeze.

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