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Michel

04/06/18 3:42 AM

#26413 RE: lambchops #26412

"...Short interest for individual stocks is updated monthly. The short interest is a combination of shares sold short by individuals, professionals and institutions including market makers and specialists. When the short interest for a stock rises above 25%, it may be a warning sign that sentiment is growing negative on the company. Stocks with short interest above 40% are highly susceptible to potential short squeezes. Stocks with smaller floats and high short interest have the highest danger of short squeezing as shortable shares become scarcer more quickly.
Short Interest and Short Squeezes
A short squeeze forms when short sellers are forced to cover some or all of their positions by buying back the shares. Usually a short squeeze ignites on a large price, and volume spikes sparked by news or rumors. The unavailability of additional short shares traps the existing short sellers, causing forced liquidations from margin calls, which sets off another wave of buying to cover short positions. Oftentimes, individual brokers may also raise the maintenance margin requirements on these stocks, which forces more short sellers to downsize their positions. This pushes the stock price even higher as more desperate short sellers panic trying to cover."




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