What Is Short Squeeze?
Definition and plain-English explanation of "Short Squeeze"
A short squeeze occurs when a heavily shorted stock rises sharply, forcing short sellers to buy back shares to cover their positions — which drives the price even higher, creating a feedback loop. The most famous recent short squeeze was GameStop (GME) in January 2021, when retail investors on Reddit's WallStreetBets drove the stock from around $20 to nearly $500.
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Market Navigator Glossary — plain-English definitions of 93+ investing and crypto terms. All content is for educational purposes only and does not constitute financial advice.