Category: Short Squeeze

Top Tech Short Squeeze Stocks

by Fred Fuld III

Yesterday, the Dow Jones Industrial Average tanked by around 1200 points, the biggest drop since June 2020. The technology stocks were heavily hit.

This may create a buying opportunity for tech stocks that are heavily shorted.

Do short squeeze stocks actually go up?

On August 22, 2022, I posted an article about meme related short squeeze stocks, and pointed out Bed Bath and Beyond (BBBY) after it had its big run-up. In exactly one week after the article was posted, the stock jumped by more than 43%.

Another stock that was described was Intercept Pharmaceuticals, Inc. (ICPT), which increased by almost 5% in just two days.

The stock with the biggest short ratio (days to cover), at 14.3, was Heron Therapeutics, Inc. (HRTX). It rose by 9.5% in three days.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

The following are some heavily shorted tech stock that may be worth considering.

CompanySymbolShort % of FloatShort % ChangeShort Interest Ratio
Asana, Inc.ASAN20.59%15%4.3
Avaya Holdings Corp.AVYA33.68%57%1.5
Ebix, Inc.EBIX24.67%-1%11.2
iRobot CorporationIRBT25.60%10%7

The first stock on the list, Asana (ASAN), a San Francisco based work management software company, has over 20% of its float shorted, an increase of 15% over last month. This is considered a daily substantial amount.

The short interest ratio is 4.3, which means that it would take the short sellers more that four days to cover their position, based on recent average volume.

The Massachusetts based robot maker iRobot (IRBT) is even more heavily shorted with in excess of 25% of the float shorted. It will take seven days for the short sellers to cover their positions.

Just keep in mind that just because a stock has good earnings ratios and is heavily shorted, doesn’t mean that the stock will go up, especially in a bear market. Also, stocks that are significantly shorted may be shorted for a reason.

Disclosure: Author didn’t own any of the above at the time the article was written.

Top 10 Short Squeeze Plays: Will One of Them Become a Meme Stock?

by Fred Fuld III

There is a way that traders and investors can make money on the long side from short squeezes. One strategy that stock traders use is buying short squeeze stocks, companies have been heavily shorted. Here is a more extensive explanation of short squeeze stocks.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

So what stocks are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that have reasons for shorting these stocks.

CompanySymbolExchangeShort InterestShort % ChangeShort RatioFloat
Bed Bath & Beyond Inc.BBBYNasdaq47.22%2%2.361.56M
Intercept Pharmaceuticals IncICPTNasdaq45.12%4%12.623.63M
Heron Therapeutics IncHRTXNasdaq39.56%1%14.3102.22M
SpringWorks Therapeutics IncSWTXNasdaq38.77%3%9.431.64M
Big Lots, Inc.BIGNYSE37.66%1%6.626.49M
MicroStrategy IncMSTRNasdaq36.51%-7%3.29.32M
Upstart Holdings IncUPSTNasdaq35.73%0%2.472.32M
Big 5 Sporting Goods CorpBGFVNasdaq35.28%2%10.220.85M
Beyond Meat IncBYNDNasdaq35.12%-7%5.556.79M
Evgo IncEVGONasdaq34.98%-2%8.367.74M
Fubotv IncFUBONYSE32.96%10%4.2166.36M

Let’s take a look at two of these stocks and compare them.

Bed Bath & Beyond (BBBY) has been in the news extensively over the last couple weeks, going from 9 to 30 and back down to 9 again. You will notice that it is at the top of the short list. However, notice the Short Ratio, which is also the Days to Cover Ratio, of only 2.3.

This means that it would take the short sellers only a couple days to cover their position, based on current average volume. Plus there has only been a 2% increase in the short positions versus last month.

Now look at number two on the list, Intercept Pharmaceuticals (ICPT), which has a very high short ratio of 12.6, meaning that it would take almost thirteen days for the short sellers to cover. In addition, the percentage increase in short positions went up by 4%.

Just keep in mind that just because a stock has good earnings ratios and is heavily shorted, doesn’t mean that the stock won’t continue to drop, especially in a bear market. Also, stocks that are significantly shorted may be shorted for a reason.

Disclosure: Author didn’t own any of the above at the time the article was written.

Looking for Short Squeeze Plays?

by Fred Fuld III

In case you haven’t noticed, the stock market has tanked recently, with most stocks dropping by a substantial amount. Some traders think we are due for a bounce, even if we are in a bear market (which I think we are).

If we are do for a bounce, what do you do?

Traders and investors can make money on the long side from short squeezes. One technique that stock traders utilize is buying short squeeze stocks, companies have been heavily shorted. Here is a more extensive explanation of  short squeezes.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

So what stocks are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that often some stocks are heavily shorted for a reason.

All these stocks have more than 30% of their float shorted, have days-to-cover greater than 6, and all are generating earnings with trailing and/or forward price to earnings ratios less than 15.

Company Symbol Short % of Float Days to Cover
Big 5 BGFV 38% 9
Big Lots BIG 34% 5.8
Conn’s CONN 42% 8.5
Camping World CWH 35% 9.1
Groupon GRPN 33% 6.2

Just keep in mind that just because a stock has good earnings ratios and are heavily shorted, doesn’t mean that the stock won’t continue to drop, especially in a bear market. Also, stocks that are significantly shorted may be shorted for a reason.

Disclosure: Author didn’t own any of the above at the time the article was written.

Top Software Stocks Short Squeeze Plays

by Fred Fuld III

Many software stocks have made all time highs in the last couple months, but others have been sinking. Several of these software companies are heavily shorted.  When stocks rise quickly in price for whatever reason, short sellers scramble to cover their positions by buying shares, and causing the price of the stock to increase even more.

Traders and investors can make money on the long side from short squeezes. One technique that stock traders utilize is buying short squeeze stocks, companies have been heavily shorted. Here is a more extensive explanation of  short squeezes.

When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short sellers can be profitable, but sometimes when the stock moves against them, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

So what stocks are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that often some stocks are heavily shorted for a reason.

All these stocks have significant short metrics.

Stock Symbol % of Float Days to Cover
Asana, Inc. ASAN 24.0% 3.23
Cazoo Group Ltd CZOO 28.5% 12.41
MicroStrategy Incorporated MSTR 23.8% 4.23
PAR Technology Corporation PAR 21.5% 12.95
Porch Group, Inc. PRCH 22.1% 8.42
Clear Secure, Inc. YOU 23.9% 7.83

Here is one example from the list above. PAR Technology (PAR) is a stock that is heavily shorted. As a matter fo fact, over 21% of the float is shorted. Plus, the short interest ratio is 12.95. That means it would take the short sellers over twelve days to cover their positions, based on the number of shares that trade each day on average.

Maybe a short squeeze will cause a few of these to rise sharply, turning lemons into lemonade.

Disclosure: Author didn’t own any of the above at the time the article was written.

Top Short Squeeze Plays

by Fred Fuld III

The stock market has been suffering during the last several days. As I write this, the Dow Jones Industrial  Average is down 528, and the SPY is down 5.85. Since the market has dropped so much, now might be the time to look for short squeeze opportunities.

Here is a quick review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics, but they have very low market caps and floats.

Company Symbol Short Interest Days to Cover Float
Cortexyme Inc CRTX 59% 4.7 15.54M
Intercept Pharmaceuticals ICPT 35% 10.5 23.58M
Blink Charging Co BLNK 34% 3.9 36.46M
Beyond Meat Inc BYND 34% 6.2 56.16M
iSpecimen Inc ISPC 33% 0.2 3.27M
Gogo Inc GOGO 32% 6.9 45.67M

So as an example, Cortexyme has 59% of the float shorted, and it will take almost five days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author didn’t own any of the above at the time the article was written

Heavily Shorted Debt Free Stocks

by Fred Fuld III

Many of the meme stocks, such as GameStop (GME) and AMC (AMC), have shot up in price several times because of the fact that they have been heavily shorted and subject to a short squeeze.

So if you are looking for other heavily shorted stocks, you might want to check out the stocks which have a large portion of their float shorted, and in addition, have low or no debt. If a company has no debt, it is hard for them to go out of business.

Here is a review of the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Big 5 Sporting Goods (BGFV) has over 45% of its float shorted and no long term debt. The percentage shorted has increased by 15% over last month. In addition, the stock has a short interest ratio, also known as a Days to Cover Ratio, of 5.9. This means that it would take almost six days for short sellers to cover their position, based on recent volume. The stock trades at 5.5 times trailing earnings. It is a sporting goods retailer in the western United States.

OppFi Inc. (OPFI) has 12.3$ of its float shorted. The short entered has had a one month increase of 6% and a short interest ratio of 4.4. The company operates a financial technology platform.

Sunlight Financial Holdings (SUNL) is another debt free company that has over 10% of of its float shorted. The percentage shorted has increased by 9% over last month. Plus, the stock has a short interest ratio of 6.0. The company provides a financing platform for solar installation.

Happy squeezing!

20 Stocks With More Than 30% of Float Shorted: Short Squeeze Plays

by Fred Fuld III

Are you looking for some short squeeze plays? Are you looking for stocks that have over 30% of their float shorted?

Here is a list of 20 stocks that fit this criteria.

Altimeter Growth Corp. AGC
Beam Global BEEM
BEST Inc. BEST
Big 5 Sporting Goods Corporation BGFV
Blink Charging Co. BLNK
Esperion Therapeutics, Inc. ESPR
Arcimoto, Inc. FUV
Canoo Inc. GOEV
Intercept Pharmaceuticals, Inc. ICPT
Kaixin Auto Holdings KXIN
Nikola Corporation NKLA
NeuroPace, Inc. NPCE
PubMatic, Inc. PUBM
Lordstown Motors Corp. RIDE
Reneo Pharmaceuticals, Inc. RPHM
SmileDirectClub, Inc. SDC
Support.com, Inc. SPRT
Tattooed Chef, Inc. TTCF
View, Inc. VIEW
VPC Impact Acquisition Holdings VIH

 

Disclosure: Author didn’t own any of the above at the time the article was written.

Stocks with the Highest Short Interest: Short Squeeze Plays

by Fred Fuld III

As I write this, the Dow Jones Industrial  Average is down 477, and the S&P is also down. Maybe while the market has dropped so much, now might be the time to look for short squeeze opportunities.

Here is a review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Stock Symbol % Float Shorted Days to Cover Stock Price
Workhorse WKHS 35% 2.2 8.97
Arcimoto FUV 34% 5.4 10.94
Blink BLNK 34% 6.2 30.09
Support.com SPRT 33% 1.5 8.31

So as an example, Arcimoto has 34% of the float shorted, and it will takeover five days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author didn’t own any of the above at the time the article was written

Top Short Interest Analyzers

by Fred Fuld III

NASDAQ has a service on their site which allows you to check on the short interest on any NASDAQ stock for any month.

For example, if you enter Sundial (SNDL) [short interest is measured on the 15th of every month], you come up with the fact that the short interest is 267,716,798 shares, an increase of 4.47% from the prior month, with an average daily share volume of 208,079,855 and 1.29 days to cover.

For NYSE stocks, such as GameStop (GME) and AMC (AMC), check out Shortsqueeze.com. It will give you the following:
Short Interest Ratio (Days To Cover)
Short Percent of Float
Short % Increase / Decrease
Short Interest (Current Shares Short)
Shares Float
Short Interest (Prior Shares Short)

There is also a website called Shortinterest.com which shows the top shorted stocks.

Disclosure: Author owns SNDL.

Top Short Squeeze Stocks

by Fred Fuld III

Remember when GameStop (GME) went up over 700% in five days due to a short squeeze? The movie theater chain, AMC (AMC) increased by over 1,000% in ten days from a short squeeze.

Here is a review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Stock Symbol % Float Shorted Days to Cover Stock Price
PubMatic Inc. PUBM 45.53% 4.3 36.43
Esperion Therapeutics ESPR 41.16% 14 22.32
Ontrak Inc. OTRK 39.69% 3.3 31.71
Blink Charging Co. BLNK 37.78% 2 30.94

So as an example, Esperion has over 41% of the float shorted, and it will take 14 days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author didn’t own any of the above at the time the article was written.