What is a short squeeze and is this a common phenomenon?
Before we can get to answering what a short squeeze is, we need to answer some preliminary questions.
Let’s start with what is short?
A short is a position taken by an investor or trader making a bet that an asset’s price will go down, not up. On average, under 5% of the S&P market capitalization is shorted. Most participants in the stock market invest because they believe US stocks will go up over time. Shorts are a very small group of investors betting against most other investors’ view of the direction in the market and as such, are viewed with disdain.…