Identifying Potential Short Squeeze Opportunities on the NYSE

Have you ever been in a situation where you’ve shorted a stock, only to witness a sudden surge, leading to an immediate scramble to close your position?

What occurred is commonly referred to as a Short Squeeze. Even veteran traders have encountered this event. Yet, do they truly grasp what happened?

A short squeeze occurs when a heavily shorted stock experiences a significant surge in buying volume, prompting short sellers to close their positions, thus driving prices higher due to the resulting covers.

Shorting a stock involves aiming to profit from its price decline. Essentially, you borrow shares, sell them, and later repurchase them ideally at a lower price to return. This process occurs electronically, so you won’t physically witness the borrowing and returning; instead, it reflects as a negative share count on your screen.

Short sellers can see profits, but when a stock starts to move against them, rising in value, they often rush to buy shares to close their positions, resulting in a short squeeze. This rapid increase in share prices during a short squeeze can be triggered by any positive news.

Finding a stock for a short squeeze involves identifying certain characteristics that make it a potential candidate: 

  1. Look for stocks with high short interest ratios (the ratio of shares sold short compared to shares available for trading), as these indicate a large number of investors betting against the stock. 
  • Additionally, consider stocks with low float (the number of shares available for trading), as a smaller float can exacerbate price movements, especially if demand suddenly increases.
  • Lastly, monitor stocks with upcoming catalysts such as earnings reports or significant news announcements, as positive developments can trigger short squeezes by prompting short sellers to cover their positions quickly.

Some traders capitalize on this scenario by seeking out stocks with potential for a short squeeze. Below, you’ll find further elaboration on the information provided above:

Short Percentage of Float indicates the portion of shares held short divided by the total float, representing freely tradable shares. A short percentage exceeding 10% to 20% is often seen as high and may suggest potential opportunities for short squeezes.

The Short Ratio, also referred to as Days to Cover or Short Interest Ratio, is a critical measure for identifying potential short squeeze opportunities. It signifies the number of days it would take for short sellers to repurchase their positions based on the average daily trading volume of shares. This ratio is significant because it reveals the challenge short sellers encounter in covering their positions without significantly impacting the stock price. A higher number of days to cover implies a more prolonged squeeze, amplifying potential losses for short sellers.

Short Percentage Increase denotes the percentage rise in the number of short sellers compared to the previous month.

The following are some heavily shorted NYSE stocks that may be worth considering for a short squeeze.

CompanyCompany SymbolShort InterestShort % ChangeShort Interest Ratio
Kohl’s CorporationKSS33.39%3%6.9
Guess?, Inc.GES32.34%4%6.7
C3.ai IncAI31.85%1%4.7
Virgin Galactic Holdings IncSPCE29.18%11%7.5
ChargePoint Holdings IncCHPT28.58%-2%7.9
Carvana CoCVNA28.54%-4%4.2
Big Lots, Inc.BIG28.37%6%5.1

The first stock on the list, Kohl’s Corporation (KSS) has over 33% of its float shorted, an increase of 3% over last month. The short interest ratio is 6.9, which means that it would take the short sellers over six days to cover their position, based on recent average volume.

The second stock on the list, Guess?, Inc. (GES) has over 32% of its float shorted, an increase of 4% over last month. The short interest ratio is 6.7, which means that it would take the short sellers under seven days to cover their position, based on recent average volume. 

An interesting stock on the list, Virgin Galactic Holdings Inc. (SPCE) has over 29% of its float shorted, a large increase of 11% over last month. The short interest ratio is 7.5, which means that it would take the short sellers just over a week to cover their position, based on recent average volume. 

While a stock might display promising ratios and draw considerable short interest, it’s essential to understand that these indicators alone don’t assure an upward price movement, especially in a bear market. Moreover, elevated levels of short interest in a stock may indicate underlying issues or concerns that have led investors to take positions against its performance.

Disclosure: Author had no positions in any of the above at the time the article was written.

Stocks Going Ex Dividend the Second Week of December

Here is our latest update on the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until after the ex date.

The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, lots with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, the quarterly dividend amount, and annual yield.

Ameren Corporation (AEE) 12/12/2017 0.458 2.81%
Guess?, Inc. (GES) 12/12/2017 0.225 5.64%
Hewlett Packard Enterprise (HPE) 12/12/2017 0.075 1.84%
HP Inc. (HPQ) 12/12/2017 0.139 2.53%
Macy’s Inc (M) 12/14/2017 0.377 6.02%
Nasdaq, Inc. (NDAQ) 12/14/2017 0.38 1.79%

The additional ex-dividend stocks can be found here at wstnn.com. (If you have been to the website before, and the latest link doesn’t show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WStNN.com. Most of the lists are free.

Dividend definitions: Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Don’t forget to reconfirm the ex-dividend date with the company before implementing this technique.

Disclosure: Author did not own any of the above at the time the article was written.

 

Stocks Going Ex Dividend the Second Week of June

Here is our latest update on the stock trading technique called ‘Buying Dividends,’ also commonly referred to as ‘Dividend Capture.’ This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend.

This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can’t sell the stock until after the ex date.

The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, lots with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, the quarterly dividend amount, and annual yield.

Avery Dennison Corporation (AVY) 6/5/2017 0.45 1.91%
Guess?, Inc. (GES) 6/5/2017 0.225 7.22%
Halliburton Company (HAL) 6/5/2017 0.18 1.58%
Kohl’s Corporation (KSS) 6/5/2017 0.55 5.20%
Southwest Airlines Company (LUV) 6/5/2017 0.125 0.66%

The additional ex-dividend stocks can be found here at wstnn.com. (If you have been to the website before, and the latest link doesn’t show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WStNN.com. Most of the lists are free.

Dividend definitions: Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List

Record date: the day when you must be on the company’s books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Corporate Stock Earnings Reports for Week 5 of November

Looking for some interesting moves in some stocks this upcoming week? Check out the companies that will be reporting earnings.

If earnings exceed analysts’ expectations, the stocks can shoot up. If the numbers underperform, the stock can tank. Then again, occasionally, stocks don’t move the way you would have expected.

Anyway, many traders use earnings plays for trading strategies. Also, option traders look for high implied volatility of stocks for for option selling strategies.

Here are many of the enormous number of stocks reporting earnings this week:

Monday

  • VNET
  • SFUN
  • SCVL
 
Tuesday
 
  • ADSK
  • BNS
  • FSC
  • MNK
  • SPLK
  • TIF
Wednesday
  • AEO
  • BOX
  • GES
  • LZB
Thursday
 
  • AMBA
  • DG
  • KR
  • LE
  • SWHC
  • TD
 
Friday
 
  • BIG
  • FRED

If you like interesting stock lists like this, be sure to check out many of the free stock lists here at WallStreetNewsNetwork.com.


Corporate Earnings Announcements for Week 4 of August

Looking for some interesting moves in some stocks this upcoming week? Check out the companies that will be reporting earnings this week.

If earnings exceed analysts’ expectations, the stocks can shoot up. If the numbers underperform, the stock can tank. Then again, occasionally, stocks don’t move the way you would have expected.

Anyway, many traders use earnings plays for trading strategies. Also, option traders look for high implied volatility of stocks for for option selling strategies.

Here are many of the enormous number of stocks reporting earnings this week:

Monday

 
CO
MPSX
NDSN
PINC
ZOES
 
Tuesday
 
BMO
BBY
INTU
LZB
RGS
TOL
Wednesday
GES
HPQ
RY
WDAY
Thursday
 
FLWS
ADSK
CM
DG
GME
SDRL
TIF
TD
 
Friday
 

LFC

If you like interesting stock lists like this, be sure to check out many of the free stock lists at WallStreetNewsNetwork.com.