Short squeeze
A short squeeze is a rapid rise in a 's price that forces to buy back shares to limit their losses, and that forced buying itself pushes the price up further, creating a feedback loop. It typically starts with some catalyst, positive news, a broad market rally, or simply persistent buying, that begins pushing a heavily shorted higher, putting pressure on the traders who bet against it.
As the price climbs, start facing mounting losses on a position that has no natural ceiling the way a long position has a floor at zero. At some point, enough decide, or are forced by a , to and exit the position, and that wave of buying adds to the very upward pressure that triggered it in the first place. The effect is strongest in with high relative to , meaning a high figure, and in that are , since both conditions mean there is a large short position that cannot easily or cheaply be unwound.
Short squeezes can produce dramatic, fast price spikes that have little to do with a company's underlying business performance, since the buying is driven by scrambling to close positions rather than by new information about the company's value. These moves tend to be temporary, once the bulk of the short covering is done, the artificial source of buying pressure disappears, and the 's price often gives back a significant portion of the spike once the squeeze has run its course.