The economic hit taken by the 2008 recessionĪll these factors were suitable catalysts to trigger a short squeeze and send the stock to highs it had never seen before.There were a few different factors that led to this short squeeze including like: For a brief period of time, the short squeeze made Volkswagen one of the most valuable companies by market cap during that time. There are also exceptions to this, depending on the public interest of the stock that can make them last much longer.įor example, the Volkswagen short squeeze of 2008 lasted approximately 31 trading days from the time it started and is considered one of the most famous short squeezes of all time. However, for the most part, short squeezes are very temporary and last up to an average of 2 weeks. Many factors impact how long a short squeeze will last. It’s worth noting that a short squeeze is often times a very short-lived event. The term “short squeeze” indicates that short-sellers or “bears” are being “squeezed” or forced to get out of their positions.įor a short squeeze to occur, there has to be a significant short interest in the stock along with a catalyst that pushes the price of the stock up in a short period of time. This rise in price can trigger margin calls for short-sellers, forcing them to close their short positions and buy back shares of the stock. A short squeeze begins when the price of a stock goes up quickly in a short period of time. For a short squeeze to happen, there has to be a significant level of short interest Short Squeeze ExplainedĪ short squeeze is a market trading condition that occurs when “short sellers” are forced to close out their stock positions due to rising stock prices. Short squeezes are often triggered by short-sellers hitting margin calls.A short squeeze occurs when short sellers are forced to close out their stock positions due to a rapid rise in the price of the stock.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |